In a landmark announcement, Centers for Medicare & Medicaid Services (CMS) has unveiled a sweeping expansion of its Risk Adjustment Data Validation (RADV) audit program signaling a new era of scrutiny of Medicare Advantage Organizations (MAOs).
Medicare Advantage (MA) risk adjustment audits are evolving faster than ever. After years of delays, shifting guidance, and legal uncertainty, the Centers for Medicare & Medicaid Services (CMS) has doubled down on Risk Adjustment Data Validation (RADV) audits as a core program integrity priority. For context, MAOs receive a monthly payment from CMS based on their members' diagnoses in the form of a risk adjustment payment. RADV audits are their way of verifying that diagnosis codes submitted for risk adjustment are supported by documentation. If MAOs don’t perform well in the audit, they could face significant extrapolated repayment penalties according to the RADV final rule.
Recent CMS memos, updated audit instructions, and public statements make one thing clear: RADV audits are no long episodic events. They are now a routine, high-stakes compliance reality for MAOs.
Below is an updated look at what plans need to know and how to prepare.
CMS's aggressive and expanded RADV audit strategy
Beginning in 2025, CMS announced a sweeping expansion of the RADV program aimed at accelerating audits and addressing a significant backlog of payment years. Under this strategy, CMS intends to audit all RADV eligible MA contracts annually, rather than a limited subset of plans.
Key elements of this approach include:
- Audits across all eligible contracts, significantly increasing the number of plans subject to RADV review each year, a jump from about 60 to ~550 plans per year.
- Variable sample sizes ranging from 35 to 200 enrollees, based on contract size and other criteria.
- Extrapolation of audit findings, meaning unsupported diagnoses identified in a sample may be projected across the full contract.
- Expanded CMS coding resources, including a substantial increase in certified medical coders supporting RADV audits from 40 to approximately 2,000.
- Planned use of technology, including AI-enabled tools, to support coder efficiency (with all final determinations made by certified human coders).
CMS has been clear that strengthening oversight of MA payments is a top priority, citing concerns about unsupported diagnoses and the integrity of risk-adjustment payments.
