Starting January 2024, the Medicare Parts C and D Oversight and Enforcement Group of the Centers for Medicare & Medicaid Services (CMS) will begin conducting both Program Audits and focused audits of Medicare Advantage organizations (MAO) to assess compliance with the Utilization Management (UM) requirements finalized in CMS-4201-F released in April 2023.

An overview of the routine program audits was updated in December 2023 and is available on the CMS website.[1] Focused audits will be limited in scope and duration and will only test the Compliance Program Effectiveness (CPE) and Organization Determinations, Appeals, and Grievances (ODAG) program areas during focused audits. Selected plans will receive additional instructions and guidance upon notification of a focused audit.

Organizations offering Medicare Advantage (MA) plans and MA Prescription Drug Plans (MAPD) may be subject to a focused audit even if the organization completed a 2021 or 2022 routine program audit. Organizations audited in 2023 and will undergo a CMS-led audit validation may be subject to a review of the new UM requirements during the validation audit.[2] Through a combination of routine and focused audits in 2024, CMS aims to evaluate the UM-related performance of plans serving approximately 88% of people in MA plans. Audit notification will begin in January 2024.

What is the intent of a focus audit?

CMS 4201-F emphasized that enrollees in MA plans have the same access to medically necessary care as those in traditional Medicare.

Plan sponsors must use the same Local Coverage Determinations (LCDs), National Coverage Determinations (NCDs), and general coverage and benefits used for Traditional Medicare beneficiaries. In the absence of applicable LCD/NCD for the requested services or when coverage criteria are not fully established, plan sponsors may create internal coverage criteria based on current evidence in widely used treatment guidelines or clinical literature made publicly available to CMS, enrollees, and providers.[3]

Two additional requirements in the final rule are continuity of care and avoidance of therapy disruption. Coordinated care plan prior authorization (PA) policies may only be used to confirm diagnoses or other medical criteria to determine medical necessity. Plan enrollees are allowed a minimum 90-day transition period[4] when they switch to a new MA plan while undergoing active treatment. The new MA plan may not require PA for the active treatment.[5] Approval for the active treatment must be for a duration medically reasonable and necessary to avoid disruptions in care per applicable coverage criteria, the enrollee’s medical history, and the treating provider’s recommendation. To ensure PA is used appropriately, CMS requires Plan sponsors to establish a UM Committee to review policies annually and ensure decisions are consistent with Traditional Medicare’s LCD/NCD guidelines. The final rule also defines the required composition and responsibilities of the Committee.

There are provisions in CMS 4201-F to protect people with Medicare from confusing and potentially misleading marketing schemes while also ensuring they have accurate and necessary information to make coverage choices that best meet their needs.

What must plans be prepared with for focus audit?

When selected for a focus audit, CMS may ask for supporting documentation from Plan sponsors to demonstrate the following:

  1. Updated written policies and procedures, or desktop procedures of their UM processes, that comply with the requirements and are timely and consistently applied.
  2. Training materials for the staff tasked to implement the requirements and evidence of completed training. Staff members can be from the Claims Department, the UM Department, or the Care Management team.
  3. Internal oversight via monitoring and audits of procedures to prevent, detect, and correct errors, manual or programmed.
  4. Provider awareness of the updated PA requirements and criteria and
  5. Corrective actions for systematic errors.

Medicare program audit has a compressed schedule for data submission, e.g., universe submission within 15 business days of the engagement letter, data integrity testing within five days of receipt of universes, and are allowed a maximum of 3 attempts to provide complete and accurate universes. Focus audits may have a similar timeline for data submission. Plan sponsors are well advised to begin practicing preparation of universes before notification of an audit.

Leveraging technology tools and compliance expertise

Inovaare’s innovative solutions, along with our subject matter experts’ guidance, provide a reliable pathway for health plans to swiftly prepare for CMS program and focus audits. By leveraging our specialized tools, health plans can ensure accurate and timely universe submissions, significantly reducing the risk of non-compliance, leaving plan sponsor ample time and resources to review and prepare for new regulatory requirements for which supporting documents should be updated for 2024-25 when the requirements take effect. Inovaare compliance specialists can also help validate the supporting documentation for compliance and accuracy. Are you ready to navigate the complexities of CMS audits with ease and confidence? Contact us at or call us at 408.850.2235 to transform your audit preparation into a seamless and stress-free process.

Yvonne Tso,
PharmD, MBA Senior Vice President,
Integritas Medicare


[2] 2024 Oversight Activities, October 24, 2023

[3] 2024 Medicare Advantage and Part D Final Rule (CMS-4201-F), April 5, 2023

[4] 42 CFR 422.112

[5] Transition benefits during the first 90 days of enrollment for a new member are already a requirement for Part D.