CMS sets sights on enhancing MA auditing efforts

CMS recently announced plans to enhance its risk adjustment data validation (RADV) auditing efforts for Medicare Advantage (MA) plans. The agency will begin auditing all eligible MA contracts for each payment year (PY) effective immediately, and it will devote resources to expedite the completion of audits for PYs 2018–2024.

MA plans receive risk-adjusted payments based on the selected diagnoses, and CMS conducts RADV audits to confirm that the diagnoses are supported in the documentation. Federal agencies estimate that MA plans may overbill by up to $43 billion per year, according to CMS. The agency stated that it is several years behind in these audit processes, noting that the last significant recovery efforts for MA overpayments occurred following the audit of PY 2007.

CMS plans to address the backlog and complete all remaining RADV audits for PYs 2018–2024 by early 2026. The agency will enhance its systems to more efficiently review medical records and identify unsupported diagnoses. In addition, it will increase its team of medical coders who manually verify flagged diagnoses from 40 to 2,000 by September 1.

These improvements will allow CMS to increase its previous audit volume of roughly 60 MA plans per year to all eligible MA plans (approximately 550 plans) in newly initiated audits, according to the press release. The agency also expects to be able to audit up to 200 records per health plan per year, as opposed to its previous volume of 35 records, for newly initiated audits.

CMS plans to work with the Office of Inspector General to recover uncollected overpayments identified in previous audits.