In a significant move to reduce fraud, waste, and abuse, the Centers for Medicare & Medicaid Services (CMS) has unveiled an assertive audit strategy targeting Medicare Advantage (MA) contracts. With new resources, cutting-edge technology, and an expanded workforce, CMS is doubling down on its commitment to integrity and transparency across federal healthcare programs.
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New Audit Program
CMS has announced a significant expansion of its Medicare Advantage audit program. By implementing this comprehensive audit strategy, CMS aims to ensure that MA plans accurately report patient diagnoses and receive appropriate payments. This initiative is expected to enhance the overall integrity of the Medicare Advantage program and safeguard taxpayer funds. Estimates suggest that Medicare Advantage plans overbill the federal government by $17–43 billion annually. The problem? CMS has fallen considerably behind in completing these audits, leading to years of unresolved overpayments—the last major recovery effort addressed payment year (PY) 2007. Since then, overpayments have mostly remained uncollected, and the issue has compounded into a costly backlog.
Key Takeaways
Increased Audit Volume and Scope
- CMS will now audit 100% of eligible Medicare Advantage contracts annually. Previously, the agency audited only a fraction of these contracts.
- Audits will increase from ~60 plans annually to approximately 550 plans.
- Health plans will face more in-depth scrutiny, with the number of records reviewed per plan rising from 35 to 35–200, depending on plan size.
Enhanced Technology for Audit Efficiency
CMS is investing in advanced technology to streamline the review process. Machine learning systems and data analytics will promptly and accurately flag unsupported diagnoses in medical records. This will speed up audits and ensure that findings are based on more reliable data. This technology-driven approach enables CMS to review higher volumes of cases while maintaining audit quality.
Workforce Expansion
Recognizing the importance of the human element in ensuring accuracy, CMS is increasing its team of medical coders from just 40 to around 2,000. These coders will manually verify flagged diagnoses, which is crucial for confirming overpayments. The expanded workforce will ensure that audits progress more swiftly without sacrificing accuracy.
Addressing the Backlog
While the focus on newly initiated audits begins immediately, clearing the backlog remains a top priority. CMS has committed to completing all remaining RADV audits from payment years 2018 to 2024 by early 2026. The agency will also work with the Department of Health and Human Services Office of Inspector General (HHS-OIG) to recover unpaid payments from earlier audits.
Implications for Medicare Advantage Plans
The expanded audits will ripple across the healthcare ecosystem, affecting plans, policymakers, and patients. Medicare Advantage plans will undergo greater scrutiny, making it essential for them to adapt and innovate to stay competitive and provide the best possible care to their members. One way to achieve this is by utilizing technology and data analytics to improve the quality and efficiency of care delivery.
