The Centers for Medicare & Medicaid Services (CMS) conducts regular Risk Adjustment Data Validation (RADV) audits to confirm the diagnoses submitted by Medicare Advantage Organizations (MAOs) and to determine in part that MAOs’ payment rates are supported by medical records. In May 2025, CMS announced a significant expansion of its RADV audit program, intensifying scrutiny on MAOs.
Under this expanded program, all current MAO contracts will now be audited annually, with record reviews increasing from 35 up to 200 per contract. CMS also announced it would devote additional resources to clear the backlog of RADV audits for plan years 2018-2024, including new technology investments and increasing the number of coders from 40 to 2,000. With estimated historical overpayment rates between 5%-8%,[1] MAOs and their network providers must adopt proactive strategies to ensure compliance and minimize financial risk.
How RADV Audits Impact Payers
- Financial Exposure: CMS uses RADV audits to identify unsupported diagnosis codes that lead to inflated risk-adjusted payments. Through extrapolation, CMS can recover overpayments across an entire contract population for one or more reporting periods based on a small sample. Appeals on the coding and statistical analysis can be costly.
- Operational Burden: Payers must respond quickly to audit sample requests, submit medical records, and coordinate with providers—all under tight timelines, which requires dedicated resources. Appeals can be time consuming for leadership and internal legal teams.
- Compliance Risk: RADV audits can uncover noncompliance in documentation practices and policies, coding accuracy, and medical necessity, leading to financial impacts.
- Reputational and Regulatory Consequences and Risk: Audit findings can affect CMS Star Ratings, contract renewals, financial risk, and public perception.
How Payers Can Prepare for RADV Audits
- Strengthen documentation and coding audit and oversight policies and procedures by establishing audit readiness as a priority.
- Conduct internal retrospective reviews of network providers’ medical records to ensure that diagnosis codes submitted for risk adjustment are accurately documented, clinically supported, and compliant with CMS RADV audit standards. Leverage data analytics to detect and prioritize outliers and high-risk coding patterns.
- Consider conducting a mock audit using the RADV audit process.
- Focus specifically on the diagnoses most commonly flagged as unsupported or miscoded in medical records:[2],[3]
- Diabetes with complications
- Major depressive disorder
- Congestive heart failure
- Vascular disease
- Chronic obstructive pulmonary disease (COPD)
- Cancers (lung, breast, colon, prostate)
- Understand the CMS RADV audit process and how to appeal audit findings. Payers should have established policies and procedures to prepare formal responses to CMS audit findings, organize and submit supporting documentation, and navigate the RADV reconsideration and appeals processes.
- Establish a RADV response team, including compliance, coding, legal, and provider relations, to track all CMS RADV audits and develop workflows for RADV requests, record retrieval, validation process and submission, and final results management including revisions to processes, provider education, and managing appeals.
- Monitor CMS guidance and audit reports to stay informed about CMS audit protocols and updates.
- Ensure reporting-year corrections address additions and deletions, as appropriate.
- Engage legal and consulting experts to assist with RADV audit readiness and dispute resolution processes.
How RADV Audits Impact Providers
Although RADV audits are conducted at the MAO contract level, providers play a critical role in supporting diagnosis codes. Inaccurate or incomplete provider documentation of patient diagnoses can lead to disallowed codes and retroactive recoupments. Many MAO and provider agreements include provisions that allow MAOs to recover payments from providers for submission of inaccurate coding thereby creating provider financial risk and potential reputational damage. Smaller providers may be especially vulnerable. MAOs may also choose to end agreements with providers based on poor audit performance.
How Providers Can Prepare for RADV Audits
- Strengthen documentation by establishing standards and educating clinical providers and staff on best practices for documentation and compliance, including specific guidance regarding ICD-10-CM codes, ensuring awareness of Hierarchical Condition Category (HCC) codes and the impact on risk adjustment scores.
- Train and educate physicians, non-physician practitioners, and clinical staff on RADV audit criteria.
- Collaborate with MAOs to establish and implement workflows for tracking of MAO audits, record retrieval, and timely submission.
- Utilize data analytics to monitor high-risk diagnoses, which may be flagged for RADV-focused audit.
- Conduct internal coding and diagnoses audits for documentation accuracy and record completeness.
- Ensure accurate annual reporting to payers with which a risk-based contract is in effect and coordinate with the payer regarding any corrections necessary.
How PYA Can Help
As a trusted healthcare consulting firm, PYA empowers MAOs and providers to proactively reduce financial risk in today’s intensifying regulatory environment. Our consultants employ targeted compliance strategies, risk adjustment documentation and reimbursement assessments, and audit readiness through mock RADV audits to help organizations navigate increased government scrutiny and evolving CMS enforcement. By aligning documentation practices, coding accuracy, and operational workflows with CMS’ expectations, we enable our clients to safeguard reimbursement integrity, strengthen payer-provider collaboration, and protect the quality of care delivered to Medicare Advantage beneficiaries.
Resources for Payers and Providers
- CMS RADV Program Overview:
https://www.cms.gov/data-research/monitoring-programs/medicare-risk-adjustment-data-validation-program - PY 2019 RADV Audit Methods & Instructions (PDF):
https://www.cms.gov/files/document/payment-year-2019-radv-audits-methods-and-instructions-6-26-25.pdf - RADV Fact Sheet – Recovering Improper Payments (PDF):
https://www.cms.gov/files/document/cpi-radvfact-sheet.pdf - CMS Press Release – RADV Audit Expansion Strategy:
https://www.cms.gov/newsroom/press-releases/cms-rolls-out-aggressive-strategy-enhance-and-accelerate-medicare-advantage-audits - RADV Audit Dispute and Appeal Guidance (PDF):
https://www.cms.gov/files/document/ma-radv-reconsiderations-guidance-01-16-2025pdf.pdf - RADV Medical Record Checklist (PDF):
https://www.cms.gov/Research-Statistics-Data-and-Systems/Monitoring-Programs/recovery-audit-program-parts-c-and-d/Other-Content-Types/RADV-Docs/RADV-Checklist.pdf - OIG Work Plan – Targeted RADV Reviews:
https://www.oig.hhs.gov/reports-and-publications/workplan/summary/wp-summary-0000422.asp - OIG Audit Report – MMM Healthcare:
https://oig.hhs.gov/reports/all/2024/medicare-advantage-compliance-audit-of-diagnosis-codes-that-mmm-healthcare-llc-contract-h4003-submitted-to-cms/ - OIG Toolkit – Identifying High-Risk Diagnosis Codes:
https://oig.hhs.gov/reports/all/2023/toolkit-to-help-decrease-improper-payments-in-medicare-advantage-through-the-identification-of-high-risk-diagnosis-codes/ - OIG Compliance Toolkits:
https://oig.hhs.gov/compliance/compliance-toolkits/ - OIG Report – Questionable Use of HRAs:
https://oig.hhs.gov/reports/all/2024/medicare-advantage-questionable-use-of-health-risk-assessments-continues-to-drive-up-payments-to-plans-by-billions/ - A Provider’s Guide to New Medicare Advantage Rules:
https://www.pyapc.com/insights/a-providers-guide-to-new-medicare-advantage-rules/ - Washington Updates: May 22 | OBBBA Update, Medicare Advantage Plan Audits:
https://www.pyapc.com/insights/washington-updates-may-22-2025-obbba-update-medicare-advantage-plan-audits/
[1] https://www.cms.gov/files/document/cpi-radvfact-sheet.pdf
[2] https://www.oig.hhs.gov/reports-and-publications/workplan/summary/wp-summary-0000422.asp
[3] https://oig.hhs.gov/reports-and-publications/workplan/summary/wp-summary-0000150.asp
