WASHINGTON, D.C. – The Centers for Medicare & Medicaid Services (CMS) has unveiled a significant expansion of its Medicare Advantage (MA) auditing program aimed at addressing fraud, waste, and abuse in federal healthcare. The effort, which begins immediately, will include annual audits of all eligible MA contracts and accelerated completion of outstanding audits for payment years 2018 through 2024.
“We are committed to crushing fraud, waste, and abuse across all federal healthcare programs,” said CMS Administrator Dr. Mehmet Oz. “While the Administration values the work that Medicare Advantage plans do, it is time CMS faithfully executes its duty to audit these plans and ensure they are billing the government accurately for the coverage they provide to Medicare patients.”
MA plans operate under a risk-adjusted payment model, where providers receive higher reimbursements for patients with more severe health conditions. CMS conducts Risk Adjustment Data Validation (RADV) audits to confirm that diagnoses used to determine these payments are supported by appropriate medical documentation. However, the agency is years behind in completing these audits.
The administration has estimated that MA plans may overbill the government by up to $17 billion annually, with some analyses suggesting this number could rise as high as $43 billion. Previously completed audits of payment years 2011 to 2013 revealed overpayment rates of between 5% and 8%.
To address these issues, CMS has committed to completing all outstanding audits for payment years 2018 to 2024 by early 2026. Measures announced to achieve this include:
- Enhanced Technology: CMS plans to deploy advanced systems to review medical records and identify unsupported diagnoses efficiently.
- Workforce Expansion: The agency will increase its team of medical coders from 40 to approximately 2,000 by September 2025. These coders will manually verify flagged records for accuracy.
- Audit Volume Increase: CMS will significantly boost its audit scope, moving from auditing around 60 MA plans a year to auditing all 550 eligible MA plans annually. The number of records reviewed per plan will rise from 35 to as many as 200, depending on plan size.
CMS will also collaborate with the Department of Health and Human Services Office of Inspector General (HHS-OIG) to recover previously identified overpayments that remain uncollected.
This initiative marks one of the most ambitious efforts to date to ensure compliance and financial integrity in the rapidly growing Medicare Advantage sector. By reinforcing accountability, CMS aims to protect taxpayer dollars and uphold the sustainability of Medicare for future beneficiaries.
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