In a final rule released on January 30th, the Centers for Medicare & Medicaid Services (CMS) finalized technical details regarding the Medicare Advantage (MA) Risk Adjustment Data Validation (RADV) program that CMS uses to recover improper risk adjustment payments made to Medicare Advantage (MA) plans. The RADV final rule is intended to help CMS to protect the MA program by addressing instances where Medicare paid Medicare Advantage Organizations (MAOs) more than they otherwise should have received because the medical diagnoses submitted for risk adjustment payment were not supported in the beneficiary’s medical record. Specifically, this final rule codifies in regulation that, as part of the RADV audit methodology, CMS will extrapolate RADV audit findings beginning with payment year (PY) 2018.
As required by law, CMS’ payments to MAOs are adjusted based on the health status of enrollees, as determined through medical diagnoses reported by MAOs. Studies and audits done separately by CMS and the HHS Office of Inspector General (OIG) have shown that Medicare Advantage enrollees’ medical records do not always support the diagnoses reported by MAOs, which leads to billions of dollars in overpayments to plans and increased costs to the Medicare program as well as taxpayers. Despite this, no risk adjustment overpayments have been collected from MAOs since Payment Year (PY) 2007.
The RADV final rule can be accessed at the Federal Register here: https://www.federalregister.gov/public-inspection/2023-01942/medicare-and-medicaid-programs-policy-and-technical-changes-to-the-medicare-advantage-medicare
View the fact sheet on the final rule here: https://www.cms.gov/newsroom/fact-sheets/medicare-advantage-risk-adjustment-data-validation-final-rule-cms-4185-f2-fact-sheet.