Risk Adjustment Data Validation (RADV) audits have become a critical compliance and financial concern for Medicare Advantage (MA) plans. With evolving regulations, advanced technologies, and increased scrutiny from the Centers for Medicare & Medicaid Services (CMS), RADV audits are expected to undergo significant changes in 2025 and beyond.

In this article, we explore what’s ahead for RADV audits, key trends that will shape the future, and how MA organizations can proactively adapt.

1. Increased CMS Scrutiny and Enforcement

CMS has been ramping up oversight of risk adjustment practices to ensure accuracy in Medicare Advantage payments. The 2023 Final Rule on RADV audits introduced extrapolation, allowing CMS to recover overpayments based on a sample of records rather than just individual errors. This approach is expected to remain a major factor in 2025 and beyond.

What This Means for Health Plans:

• More financial risk: With extrapolation in place, even a small error rate could lead to substantial repayments.
• Stricter compliance expectations: Plans will need to ensure their risk adjustment data is accurate and well-documented.
• Higher volume of audits: More plans could be selected for RADV audits as CMS increases oversight.

2. Advancements in Technology for Audit Readiness

The future of RADV audits will likely see greater use of AI, automation, and predictive analytics in both compliance efforts and CMS auditing processes.

How Technology Will Shape RADV Audits:

• AI-driven coding validation: Machine learning can help detect potential errors in Hierarchical Condition Category (HCC) coding before submission.
• Predictive analytics for risk assessment: Health plans can use historical data to anticipate which areas may trigger audit flags.
• Automated documentation review: AI-powered tools can streamline medical record reviews, reducing manual effort and improving accuracy.

3. Stricter Medical Record Documentation Requirements

CMS will continue to emphasize complete and accurate documentation for risk adjustment submissions. Inadequate provider documentation is a common reason for audit findings, leading to potential financial penalties.

Key Documentation Challenges & Solutions:

• Challenge: Insufficient provider training on risk adjustment coding.
  • Solution: Implement ongoing education programs for physicians and coders.
• Challenge: Lack of comprehensive documentation to support HCC diagnoses.
  • Solution: Use Electronic Health Record (EHR) audits to ensure completeness before submission.

4. Expansion of RADV Audits to More Medicare Advantage Plans

Historically, CMS has focused RADV audits on a subset of Medicare Advantage organizations. However, with increased scrutiny and financial stakes, more plans could be subject to review.

What This Means for the Industry:

• Small and mid sized MA plans may face more audits.
• Greater emphasis on compliance culture across all levels of an organization.
• Increased investment in risk adjustment and compliance teams.

5. Potential Policy Changes and Legal Challenges

While CMS has taken an aggressive stance on RADV audits, legal pushback from health plans and industry groups may shape future policies. Some organizations argue that the lack of a Fee-For-Service (FFS) Adjuster creates unfair financial consequences for MA plans.

Possible Future Policy Adjustments:

• Reassessment of extrapolation methods in response to industry concerns.
• Greater transparency in CMS audit selection criteria.
• Potential legislative action to refine RADV audit policies.

How Medicare Advantage Plans Can Prepare for the Future of RADV Audits

As the landscape of RADV audits evolves, MA organizations must take proactive steps to mitigate risk and ensure compliance.

Proactive Strategies for Health Plans:

Enhance provider education to improve documentation accuracy.
Leverage AI driven audit tools for early detection of risk areas.
Conduct internal mock RADV audits to identify and correct potential issues before CMS reviews.
Stay updated on regulatory changes and be ready to adjust compliance strategies.
Collaborate with industry experts to ensure best practices in risk adjustment reporting.

Conclusion

RADV audits in 2025 and beyond will bring greater regulatory enforcement, technological advancements, and heightened financial stakes for Medicare Advantage plans. By prioritizing compliance, leveraging data-driven solutions, and staying informed on policy changes, health plans can navigate these challenges effectively.Now is the time for organizations to embrace a proactive approach to RADV audits ensuring that they are not only prepared for upcoming changes but also positioned for long-term success in the evolving Medicare Advantage landscape.