On May 21, 2025, the Centers for Medicare & Medicaid Services (CMS) issued a significant announcement that will reshape the landscape of Risk Adjustment Data Validation (RADV) audits for Medicare Advantage (MA) plans. This new development marks a major escalation in CMS’s efforts to ensure compliance, integrity, and accuracy in risk score reporting—and it carries profound implications for health plans, providers, and claims operations alike.
RADV Audit Expansion: A High-Level Overview
In its latest statement, CMS confirmed a sweeping expansion of RADV audits. Notably:
- Audit Scope Increase: CMS will now review up to 200 patient charts per contract, a substantial increase from previous years (~35 charts previously). This broadened scope suggests a deeper probe into documentation practices and a stronger emphasis on identifying discrepancies in risk adjustment data.
- Audit Timeframe Accelerated: The agency will conduct retrospective reviews for the 2018 to 2024 plan years, with a goal of completing these audits by Q2 or Q3 of 2025. This aggressive timeline signals urgency and suggests a high level of preparedness on CMS’s part.
- Extrapolation of Results: CMS reiterated its intent to extrapolate audit findings across entire plan populations. This method could lead to multi-million-dollar recoveries for CMS—and equally significant losses for impacted health plans.
- Massive Resource Investment: In a striking move, CMS is hiring nearly 2,000 medical coders despite a current coder shortage nationwide and has hinted at leveraging artificial intelligence to support the auditing process. While the exact role of AI remains unclear, it is likely to assist in data mining, flagging discrepancies, and accelerating chart reviews.
Implications for Medicare Advantage Organizations and Beyond
The scale and speed of this RADV initiative is unprecedented. For MA plans, especially those that relied heavily on aggressive coding practices, the financial exposure could be enormous. The use of extrapolation means that errors found in 200 charts could translate into tens or hundreds of millions of dollars in clawbacks.
These developments raise several pressing concerns for the healthcare ecosystem:
- Could Some MACs Be Bankrupted? Given the financial stakes, some Medicare Administrative Contractors (MACs) or smaller MA organizations could face insolvency. If clawbacks are extensive, losing MAC status is a real possibility for some organizations.
- Operational Disruption: If MACs lose contracts, new payers may enter the scene, requiring providers to learn entirely new processes for authorization, billing, and appeals—a potentially disruptive and costly transition.
- Legal Battles Ahead: The announcement is expected to trigger legal pushback. Health plans facing steep repayments may challenge the audits and extrapolation methodology in court. This could tie up billions in litigation, leading to delays in payments and claims processing issues for providers and patients alike.
What Should Providers and Health Centers Do Now?
Given the sweeping nature of this initiative, providers and community health centers should begin preparing immediately:
- Review Documentation Practices: Ensure all chart documentation fully supports diagnosis codes. Even past years’ charts could be subject to review.
- Engage Compliance Teams: Audit your own risk-adjusted charts to identify and correct potential discrepancies, adjusting reporting policies and considering resubmission and deletions as indicated.
- Prepare for Administrative Shifts: Stay alert to potential MAC or plan changes. Educate your billing staff and clinicians about evolving payer processes.
- Stay Informed: Follow CMS communications closely, especially as AI implementation becomes clearer and as legal challenges unfold.
Conclusion
The May 21 RADV announcement represents a turning point in Medicare Advantage oversight. With thousands of audits, AI tools, expanded chart reviews, and billions in potential clawbacks, the healthcare landscape is entering a period of intense scrutiny and transformation. While the long-term goal is to improve accuracy and reduce fraud, the short-term effects may bring financial volatility, legal uncertainty, and administrative upheaval.
Providers, health plans, and stakeholders should act now to assess their risk and readiness—because CMS is clearly signaling that enforcement is no longer a future concern; it’s happening now.
Need more information? BCA is developing a RADV Education Series to be released in June. Our first session, RADV Audit 101 is free to all attendees and may answer many of your questions. Following the 101 session, three additional webinars will take a deeper dive into the components of RADV audits and how clinics can prepare for changes. This series will be available for $99 and is free for BCA clients who have had an active contract with us in the last two years. Watch www.bcarev.com for registration details coming soon!