PACS Enforcement Actions & Penalties 2 — Questions and Answers
Question 1: A health plan repeatedly denies prior authorization requests without providing the required written notice. Under ERISA, what enforcement mechanism can plan participants use?
- File a complaint with OSHA
- Sue in federal court under ERISA Section 502(a) (Correct answer)
- Report the plan to the FTC
- Submit a grievance to the state insurance commissioner only
Correct answer: Sue in federal court under ERISA Section 502(a)
ERISA Section 502(a) allows plan participants and beneficiaries to bring civil actions in federal court to enforce plan terms and recover benefits.
Question 2: Which federal agency has primary authority to investigate and penalize Medicare Advantage plans that improperly deny prior authorization requests?
- Office of Inspector General (OIG)
- Centers for Medicare & Medicaid Services (CMS) (Correct answer)
- Department of Justice (DOJ)
- Federal Trade Commission (FTC)
Correct answer: Centers for Medicare & Medicaid Services (CMS)
CMS has direct regulatory authority over Medicare Advantage plans and can impose civil monetary penalties, compliance actions, or contract terminations for PA violations.
Question 3: A utilization review entity fails to use board-certified physicians to review prior authorization denials for complex surgical procedures. This most likely violates which type of requirement?
- Anti-kickback statute
- Clinical reviewer credential standards (Correct answer)
- HIPAA minimum necessary rule
- Network adequacy standards
Correct answer: Clinical reviewer credential standards
Most state UR laws and accreditation standards require that adverse determinations for complex clinical matters be reviewed by appropriately credentialed physicians.
Question 4: Under the No Surprises Act, what penalty can health plans face for failing to comply with the required prior authorization transparency disclosures?
- Criminal prosecution under 18 U.S.C. § 1035
- Civil monetary penalties up to $100 per day per violation (Correct answer)
- Mandatory plan dissolution
- Automatic enrollment suspension
Correct answer: Civil monetary penalties up to $100 per day per violation
The No Surprises Act authorizes civil monetary penalties of up to $100 per day per individual for violations of its transparency and disclosure requirements.
Question 5: A state insurance commissioner finds that a health insurer's PA denial rate for mental health services is disproportionately higher than for comparable medical services. This triggers enforcement under which law?
- Americans with Disabilities Act
- Mental Health Parity and Addiction Equity Act (MHPAEA) (Correct answer)
- Health Insurance Portability and Accountability Act
- Consolidated Omnibus Budget Reconciliation Act
Correct answer: Mental Health Parity and Addiction Equity Act (MHPAEA)
MHPAEA prohibits health plans from applying more restrictive prior authorization criteria to mental health and substance use disorder benefits than to comparable medical/surgical benefits.
Question 6: When CMS conducts an audit of a Medicare Advantage plan and finds systemic PA denial errors, which of the following is NOT a typical enforcement remedy?
- Suspension of enrollment
- Civil monetary penalties
- Immediate plan liquidation (Correct answer)
- Corrective action plans
Correct answer: Immediate plan liquidation
CMS remedies include sanctions, civil monetary penalties, corrective action plans, and enrollment suspension, but immediate plan liquidation is not a standard CMS enforcement tool.
Question 7: A provider discovers that a health plan has been automatically denying all PA requests for a specific drug without clinical review. The most appropriate first step for the provider is to:
- File a qui tam lawsuit
- Submit a formal grievance or appeal through the plan's internal process (Correct answer)
- Contact local law enforcement
- Refuse to treat the patient until coverage is confirmed
Correct answer: Submit a formal grievance or appeal through the plan's internal process
Internal grievance and appeal processes must typically be exhausted before external remedies are pursued, and they may resolve the issue more quickly.
PACS Enforcement Actions & Penalties 2
A health plan repeatedly denies prior authorization requests without providing the required written notice.
Under ERISA, what enforcement mechanism can plan participants use?