The following is a guest article by Mohammed Vaid, Founder and CEO, Chief Solution Architect at Simplify Healthcare

CMS oversight is intensifying in scope and severity. In 2024, the agency imposed 14 civil money penalties, citing 18 violations, with fines totaling $2.92 million across Part C, Part D, and one-third of financial audits. In its Part C and Part D Program Audit and Enforcement Report, CMS noted that these actions often stemmed from inaccurate benefit designs, flawed member communications, and systemic process failures that put beneficiaries at risk. For payers, the financial hit is only part of the challenge. The greater cost is measured in disruption: staff pulled from critical projects, leadership attention redirected to remediation, and member trust shaken when errors are revealed.

The pattern is familiar. Whether the audit is a routine, scheduled review or an unexpected inquiry, each one triggers a scramble to rebuild documentation and correct errors, often with expensive outside support. When the audit ends, momentum fades until the next review begins. This reactive approach has calcified into industry practice, yet it cannot withstand today’s regulatory climate. Sustained readiness must become the standard.

The Risks of Treating Compliance as Episodic

Treating compliance as an episodic event rather than a continuous discipline exposes organizations to escalating risk. Predictable audits, such as annual CMS program audits and other mandated reviews, carry the same high stakes as unplanned investigations. CMS audit protocols are structured to evaluate systemic reliability across operations, extending far beyond the review of individual documents. Under Part C and Part D, as well as Medicare-Medicaid Plan oversight, regulators are increasingly focused on how consistently plans can deliver accurate benefits and member communications at scale. Last-minute fixes cannot withstand this level of scrutiny.

The costs of episodic compliance compound over time. Staff hours are diverted from innovation to remediation. Strategic initiatives stall as teams are repeatedly pulled back into fire drills. Members experience delays when corrected communications replace timely information. STAR ratings, directly tied to revenue and competitiveness, are placed at risk when accuracy and timeliness falter.

The impact is broad. Staff morale erodes under repeated remediation, leadership is forced into distraction, and members lose confidence in their coverage. What may once have been tolerated is now a recipe for recurring penalties and long-term erosion of trust.

Building a Culture of Continuous Audit Readiness

Audit readiness must become a standing condition of payer operations. Prevention is the foundation. Benefit designs should be validated upstream against CMS model templates and regulatory guidance before they ever reach members. Document workflows must be standardized so that every Summary of Benefits, Evidence of Coverage, and Annual Notice of Change follows a consistent and documented process. Audit trails should be maintained continuously, with version control and metadata tracking aligned to Health Plan Management System (HPMS) requirements.

When readiness is embedded, routine audits become opportunities to demonstrate stability rather than disruptions to normal operations. Plans no longer need to reconstruct the past under pressure; they present compliance as a natural part of daily operations. Achieving this requires both process change and cultural alignment. Compliance must evolve from a periodic project into a defining element of organizational identity, shared across business, operations, and technology teams.

The alternative of episodic preparation takes a measurable toll. Staff morale suffers under repeated cycles of high-pressure remediation. Projects that could drive growth, such as digital front doors, provider data improvement, or interoperability initiatives, are delayed indefinitely. Members lose confidence when corrected or conflicting communications undermine their understanding of coverage. Regulators, recognizing these weaknesses, are less willing to accept superficial fixes.

Compliance Drives Ratings and Revenue

The consequences of non-compliance extend beyond financial penalties. CMS enforcement actions are often accompanied by corrective action plans, compliance notices, and heightened scrutiny that can last for years. In its 2023 Medicare and Medicaid Program Audit and Enforcement Report to Congress, CMS noted that many organizations required ongoing monitoring well past the penalty period. For payers, this creates uncertainty that affects member relations, vendor partnerships, and even board oversight.

The link between compliance performance and STAR ratings adds another layer of urgency. Communication accuracy and timeliness directly influence measures tied to plan quality. A single error in an Annual Notice of Change or Evidence of Coverage can cascade into member complaints, trigger regulator attention, and reduce STAR performance. Since STAR scores determine bonus payments and marketability, weak compliance cuts directly into revenue potential and undermines a plan’s ability to compete.

These pressures move compliance from the back office to the center of business strategy. Accuracy and timeliness now influence revenue, competitiveness, and market position. Meeting this standard requires platforms that embed compliance into the daily fabric of operations.

Platforms Anchor Compliance

CMS oversight now extends beyond traditional benefit and communication audits into new areas, such as marketing practices, interoperability, and digital access under the Interoperability and Patient Access Rule. Each new domain adds complexity, requiring plans to demonstrate control across traditional workflows as well as APIs, digital platforms, and partner ecosystems.

Fragmented tools and manual processes cannot meet this level of regulatory complexity. Managing compliance across these domains requires integrated infrastructure, not disconnected spreadsheets and siloed workflows. A platform model offers a path forward. Unifying benefit management, document creation, and audit tracking on connected systems eliminates inefficiencies, ensures validations occur automatically, and turns audit trails into living records. Compliance becomes structural, scalable, and transparent.

A platform approach equips payers to stay ahead of change. CMS will continue to revise guidance, update templates, and expand oversight through new HPMS requirements. Those clinging to siloed tools will be stuck in constant reaction. Those with platform infrastructures can adapt in real time. In a market defined by regulatory volatility, scalability and agility are not optional. They define the leaders.

About Mohammed Vaid

Mohammed Vaid is the Founder, CEO, and Chief Solution Architect at Simplify Healthcare. With over two decades of experience in healthcare technology, he has led more than 50 enterprise initiatives and contributed 45,000+ hours of solution design and technical oversight in the payer domain. His expertise spans benefit plan management, provider networks, and member communications, where he has built scalable platforms that improve accuracy, streamline operations, and strengthen compliance. Under his leadership, Simplify Healthcare helps payers meet the demands of CMS audits, HPMS reporting, and evolving interoperability requirements with systems designed for lasting readiness.