​​In May, the Centers for Medicare and Medicaid Services (CMS) announced a major overhaul of the Risk Adjustment Data Validation (RADV) audit program, expanding the size, scope, and timeline. CMS conducts annual RADV audits to ensure the accuracy of diagnosis codes submitted by MA plans. Diagnosis codes directly impact patient risk scores, which determines CMS' risk-adjusted payment amounts to MA plans per enrollee.  

CMS plans to audit all Medicare Advantage (MA) plans – more than 500 plus, a sharp increase from the approximately 60 plans previously reviewed each year. In addition, the number of records reviewed per plan has increased from about 35 to 200, substantially raising documentation demands. To support this expansion, CMS is growing its RADV workforce from 40 to 2,000 coders by September 2025 and plans to use artificial intelligence and machine learning to identify unsupported diagnoses.

CMS uses extrapolation to estimate overpayments based on a sample of medical records and applies those findings across the full plan population. Further pressure comes from CMS' goal to complete audits for Payment Years 2018 through 2024 by early 2026, compressing the timeline for plans and providers to respond.

Provider Impacts

The RADV program expansion may pose challenges for long term and post-acute care providers, especially those serving large MA populations or participating in risk-based contracts. Some providers are already being impacted, as many MA plans have begun requesting records from facilities in preparation for or to respond to the audits. This may increase documentation pressure on providers, who must respond to a higher volume of record requests with tighter turnaround times. In addition, MA plan contracts may include claw back clauses, allowing plans to recover payments from providers if CMS identifies overpayments.

AHCA has met with CMS and highlighted the system wide impact these audits are having.

Background

Although RADV audits are conducted at the plan level, they rely heavily on provider documentation in medical records, as diagnoses are only considered valid when they are clearly supported by evidence of presence, clinical evaluation, and integration into care planning.

During an audit, CMS requests a sample of medical records from an MA plan, which certified coders review to verify that the submitted diagnosis codes are supported. Documentation must also be signed, dated, and include the provider's credentials. Incomplete, vague, or documentation missing key elements may result in disallowed diagnoses and repayment demands from CMS.

Please reach out to AHCA's Population Health Policy Analyst Rohini Achal or Nisha Hammel, vice president, reimbursement ppopulation health with any questions.