CMS ramps up RADV audits

Reminder to healthcare orgs: Any audit you face can and will be used against you.

CMS is taking a no-more-Mr-Nice-Guy approach to compliance, especially when it comes to Risk Adjustment Data Validation (RADV). And it’s looking like it has AI on its side. Can you say the same?

In case you missed it: CMS recently announced it’s planning to ramp up both the *pace* and *scale* of RADV audits of the MedicareAdvantage Program, with “enhanced technology” (read: AI) driving the effort.

What you need to know:

🔴 CMS plans to clear its RADV backlog (dating back to 2018) by early 2026 — a very aggressive timeline

🔴 In the past, CMS has only audited a sample of MA plans, but now it plans to audit *ALL* eligible MA plans each year

🔴 CMS allows extrapolation of RADV audit payments — that means if CMS audits a sample of records and finds errors, it can assume errors pop up at a similar rate in all the rest of your records AND recoup overpayments accordingly

Since CMS is judging you based on only a sampling of records, you'd better hope you're consistently staying compliant.

Is your compliance workflow ready? If you only self-audit a small sample of records, manually and infrequently, this news may keep you up nights.

But here's the silver lining: Healthcare orgs can use AI too.With AI, you can self-audit not only a sample of records, but *all* records.

Don’t bring the status quo to an AI battle. You won’t win.

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More on the major changes

1. Universal annual audits
CMS will now audit all eligible MA contracts annually. That's approximately 550 plans, up from the current 60 plans per year. This signals CMS's belief that overpayment risks are widespread across the program, not limited to outlier plans.

2. Accelerated timeline
CMS plans to complete all audits for Payment Years 2018-2024 by early 2026, a dramatic acceleration from the previous multi-year timeline. Plans should expect record requests imminently.

3. Expanded sample size
Each audit will now review up to 200 medical records per plan, compared to the current 35 records, significantly increasing the administrative burden on plans and their provider networks.

4. Enhanced technology and staffing
CMS intends to leverage advanced technology systems, potentially including artificial intelligence, and expand its medical coder team from 40 to approximately 2,000 members by September 1, 2025.

The financial stakes

The expansion comes as CMS estimates MA plans overbill by $17 billion annually, with some estimates reaching as high as $43 billion. Since Payment Year 2018, CMS has been authorized to extrapolate audit findings across an entire plan population, meaning overpayments identified in sample records could result in massive recoupments.

What it means for you

For MA Plans:

• Prepare for annual audits and increased administrative burden
• Conduct internal self-audits to identify and correct unsupported diagnoses
• Establish efficient workflows for record collection and submission
• Understand RADV appeal processes and timelines

For Providers:

• Expect MA plans to pass more RADV risk downstream through contract amendments
• Review indemnification and claw-back provisions in existing and future contracts
• Work proactively with plans to address documentation deficiencies
• Be aware of increased False Claims Act enforcement risk

Bottom line

With the MA program now serving 31.6 million beneficiaries at a cost of $455 billion, federal scrutiny is intensifying. All participants in the MA ecosystem should view comprehensive RADV compliance as a critical priority, not an occasional concern. The time to prepare is now.

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