CMS Pub. 100-18, ch. 9, § 50.6.11

42 C.F.R. §§ 422.503(b)(4)(vi)(F), 423.504(b)(4)(vi)(F), 422.504(e)(2), 423.505(e)(2)

CMS has the discretionary authority to perform audits under 42 C.F.R. 44

422.504(e)(2) and 423.505(e)(2), which specify the right to audit, evaluate, or inspect

any books, contracts, medical records, patient care documentation, and other

records of sponsors or FDRs that pertain to any aspect of services performed,

reconciliation of benefit liabilities, and determination of amounts payable under the

contract or as the Secretary of Health and Human Services may deem necessary to

enforce the contract.

Sponsors must allow access to any auditor acting on behalf of the federal

government or CMS to conduct an on-site audit. On-site audits require a thorough

review of required documentation. Such reviews include any information needed to

determine compliance with the Medicare Parts C and D regulations and contracts,

such as copies of prescriptions, invoices, provider and pharmacy licenses, claims

records, signature logs, records documenting delivery status by postal carrier, long-term care delivery notice to nursing staff, other forms of documentation of

medication delivery, purchase records, contracts, rebate and discount agreements,

as well as interviews of the staff. The interviews gauge whether control activities are

practiced as dictated by the company’s policy and applicable Parts C and D

requirements are being followed. On-site audits are based on sampling or results of

desk audits. In most cases, CMS or its designee will provide reasonable notice to the

sponsor of the time and content of the audit.

The OIG has independent authority to conduct audits and evaluations necessary to

ensure accurate and correct payment and to otherwise oversee Medicare

reimbursement.

Sponsors and FDRs must provide records to CMS or its designee. Sponsors should

cooperate in allowing access as requested. Failure to do so may result in a referral

of the sponsor and/or FDR to law enforcement and/or implementation of other

corrective actions, including intermediate sanctioning in line with 42 C.F.R. Subpart

O. MEDICs and other contractors tasked to conduct audits by CMS, as well as

contractors trained by CMS and engaged by sponsors to conduct CMS data

validation audits, are acting on behalf of the federal government and are not

required to sign the sponsor’s confidentiality statement prior to the start of an on-site audit. Sponsors and FDRs are required to cooperate with CMS and CMS’

contractors, such as the NBI MEDICs. This cooperation includes providing CMS

and/or the NBI MEDICs or other contractors access to all requested records

associated in any manner with the Parts C or D program.

When CMS or its designee (e.g., the NBI MEDIC) requests information that will be

used for an audit, CMS or its designee will notify the sponsor of an appropriate time

period within which to provide the requested information.