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).
A new era of Medicare Advantage oversight is here, and it's moving fast. 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.
This is not business as usual. It’s a fundamental shift in how CMS enforces compliance, and every MAO needs to pay attention.
CMS RADV audit expansion: What it means for MA plans
According to a press release by CMS on May 21, 2025, the agency is launching an “aggressive strategy” to enhance and accelerate Medicare Advantage audits.
Key elements include:
- Increased Audit Volume: CMS will now audit all eligible MA plans annually, a jump from about 60 to 550 plans per year. It’s also expanding audit depth, increasing from 35 to up to 200 records per plan, depending on plan size.
- Expanded workforce: CMS will increase its team of medical coders from 40 to approximately 2,000 by September 1, 2025.
- Enhanced Technology: CMS will deploy advanced systems to efficiently review medical records and flag unsupported diagnoses.
- Extrapolation: Extrapolated overpayments that could skyrocket financial penalties, a risk no organization can afford to take lightly. Starting with Payment Year 2018, CMS will extrapolate audit findings to the entire MA contract and are expecting to claw back over $400M in recovery dollars with each audit payment year.
For MAOs, this is a call to action. RADV audits are no longer a “someday” concern, it’s a priority now.
