By George F. Indest III, J.D., M.P.A., LL.M., Board Certified by The Florida Bar in Health Law
Last year, the Centers for Medicare and Medicaid Services (CMS) announced a significant expansion of its auditing efforts for Medicare Advantage (MA) plans. Beginning immediately, CMS will audit all eligible MA contracts for each payment year and will allocate additional resources to expedite audits for payment years 2018 to 2024.
MA plans obtain risk-adjusted payments according to the diagnoses they report for enrollees. This results in higher payments for patients with more severe or chronic conditions. To ensure the accuracy of these claims, CMS carries out Risk Adjustment Data Validation (RADV) audits to verify that the diagnoses utilized for payment are substantiated by medical records.
Summary of Changes and Implications.
1. Effective immediately, all eligible MA contracts will be audited annually. CMS announced that it is ramping up audits of all MA plans. CMS said it plans to complete all outstanding RADV audits for 2018 through 2024 by early 2026. If implemented correctly, it will help ensure CMS’s audit findings are more reliable and can be appropriately extrapolated as allowed under the RADV final rule. These audits are necessary to ensure that premium payments to MA are accurate and that taxpayers are not overpaying.
2. Enhanced Technology and Workforce Expansion: CMS is currently several years behind in completing RADV audits. To combat this backlog, the agency will use enhanced technology to review more medical records and flag unsupported diagnoses. Additionally, CMS will substantially increase the number of medical coders employed to manually verify flagged diagnoses— increasing audit efficiency. CMS says it will expand the team of medical coders—from 40 to roughly 2,000 by September 1, 2025. These coders will manually verify flagged diagnoses to ensure accuracy. This will expedite the completion of audits for payment years 2018 through 2024, CMS said.
3. Increased Audit Volume: By utilizing technology, CMS will enhance its audits from about 60 MA plans annually to include all eligible MA plans each year in newly initiated audits (approximately 550 MA plans). CMS will also have the capability to expand its auditing from 35 records per health plan annually to a range of 35 to 200 records per health plan each year, according to the agency.
Additionally, CMS will collaborate with HHS-OIG to recoup overpayments found in prior audits, potentially reaching $43 billion annually, according to the Medicare Payment Advisory Commission (MedPAC) estimates.
Don’t Wait Until It’s Too Late; Consult with a Health Law Attorney Experienced in Medicare and Medicaid Issues Now.
The attorneys of The Health Law Firm represent healthcare providers in Medicare audits, ZPIC audits, and RAC audits throughout Florida and across the U.S. They also represent physicians, medical groups, nursing homes, home health agencies, pharmacies, hospitals, and other healthcare providers and institutions in Medicare and Medicaid investigations, audits, recovery actions, and termination from the Medicare or Medicaid Program. For more information, please visit our website at www.TheHealthLawFirm.com, call (407) 331-6620, or toll-free at (888) 331-6620.
Sources:
“CMS Announces Significant Changes to RADV Auditing Efforts: Considerations and Next Steps for the Medicare Advantage Industry.” Ropes & Gray, LLC. (May 21, 2025). Web.
Martin, Audrie. “CMS To Intensify Medicare Advantage Audits, Could Trigger ‘Untenable’ Home Health Rate Cuts.” Home Health Care News. (May 28, 2025). Web.
Press Release. “CMS Rolls Out Aggressive Strategy to Enhance and Accelerate Medicare Advantage Audits.” Centers for Medicare & Medicaid Services (CMS). (May 21), 2025). Web.
About the Author: George F. Indest III, J.D., M.P.A., LL.M., is Board Certified by The Florida Bar in Health Law. He is the President and Managing Partner of The Health Law Firm, which has a national practice. Its main office is in the Orlando, Florida, area. www.TheHealthLawFirm.com The Health Law Firm, 1101 Douglas Avenue, Suite 1000, Altamonte Springs, FL 32714, Phone: (407) 331-6620 or Toll-Free: (888) 331-6620.
“The Health Law Firm” is a registered fictitious business name and a registered service mark of The Health Law Firm, P.A., a Florida professional service corporation, since 1999.
