Medicare Advantage Organizations face unprecedented challenges as CMS accelerates RADV audits across the industry. With contract-level extrapolation now in effect and long-standing safeguards eliminated, the 2023 Final Rule on Risk Adjustment Data Validation has dramatically expanded audit scope, with plans now required to submit more comprehensive documentation than ever before. The current administration has introduced a plan to complete all remaining RADV audits for PY2018 to PY2024 by early 2026. Furthermore, CMS will now expand audits from 60 to approximately 550 MA plans annually, reviewing 35 to 200 records per plan, based on plan size, under newly initiated audit cycles. To manage this, it’s scaling coder staff from 40 to 2,000.
This write-up provides Medicare Advantage Organization (MAO) leaders with an overview of recent updates to RADV audit policies and explains how a structured audit readiness plan incorporating improved documentation practices and AI-enabled risk adjustment solutions can support effective management of related financial and operational risks.
RADV Audit Transformation 2025: What’s Changed
The 2023 CMS Final Rule, published in January 2023, introduced two transformative changes that significantly alter the compliance landscape for Medicare Advantage Organizations:
The 2023 CMS Final Rule introduced two game-changing modifications :
Extrapolation Methodology Begins with PY2018
Prior to 2023, compliance reviews recovered overpayments based solely on a small sample of enrollees. Now, under the new extrapolation methodology, error rates found in that sample are projected across the entire audited MA contract. The implementation of RADV contract-level audits represents a fundamental shift in how CMS evaluates Medicare Advantage compliance, turning even minor documentation lapses into large-scale financial liabilities.
Elimination of the Fee-For-Service (FFS) Adjuster
Historically, CMS applied an FFS Adjuster to account for differences in how diagnoses were documented under traditional Medicare. With the adjuster now eliminated, every unsupported diagnosis is treated as a full overpayment, regardless of intent or clinical nuance.
With CMS projecting $479 million in recoveries from PY2018 alone and $4.7 billion over the next decade, Medicare Advantage audits now pose existential financial perils that require immediate executive attention.
CMS Raises the Curtain on PY2018 RADV and What It Means for MAOs
CMS designated Payment Year 2018 (PY2018) as the first to undergo contract-level extrapolation under the 2023 Final Rule. While some deadlines have already passed,this audit cycle remains highly relevant as a live example of how future audits will be structured and enforced.
Why This Still Matters
Even if your MAO wasn’t selected for PY2018, this audit cycle sets the precedent. The same process and appropriate CMS-HCC coding model will apply to subsequent audits for PY2020 and beyond.
Understanding PY2018 gives you a preview of operational and compliance expectations for upcoming cycles under the extrapolated model.
Following the PY2018 precedent, CMS has now initiated the PY2019 audit cycle with notable changes. On June 13, 2025, CMS formally announced the PY2019 audit. Notably, timelines have been compressed—MAOs now have just 12 weeks to respond instead of the previous 22. The number of allowed medical records per HCC has also been reduced from five to two, significantly impacting documentation strategies. The first batch of 45 plans has been named in the official FAQ, implying more batches are expected. Full details, including audit methodologies and instructions, are available in CMS’s published FAQ and instruction documents.
The May 30 Memo: New Deadlines
On May 30, 2025, a new memo was issued that establishes strict deadlines for removing inaccurate diagnosis codes that were previously submitted. While you can’t add any new codes for past periods, it’s now mandatory to delete any that are incorrect.
The deadlines are as follows:
- PY 2020 — June 16
- PY 2021 — June 23
- PY 2022 — June 30
- PY 2023 — July 8
- PY 2024 — July 15
RADV Audit High-Risk Areas
CMS began issuing audit notices for PY2018 and is expected to continue auditing all years through PY2024, with the expectation to complete the audits by the end of 2026.
In general, understanding the different types of RADV audits is crucial for proper audit planning & preparation. Documentation requirements present the most critical vulnerability, particularly validating the PY2018 medical records using CMS-HCC v22, which may be a model unfamiliar to many current coders. Navigating CMS-HCC v22 can be difficult without adequate familiarity and can create substantial coding accuracy challenges when reviewing six-year-old charts.
The 90-Day RADV Audit Readiness Plan
Mock audits are an essential strategy. They replicate the CMS process internally, allowing MAOs to detect documentation gaps before real financial exposure arises.
RAAPID’s AI-driven retrospective end-to-end risk adjustment platform supports these mock audits, including for CMS-HCC v22, by automating chart selection, HCC validation, and surfacing unsupported codes, thereby accelerating compliance readiness.
Phase 1 (Days 1-30): Internal Assessment
- Conduct comprehensive internal audits of PY2018 documentation
- Identify high-risk HCCs requiring immediate validation
- Train coding teams on CMS-HCC v22.
Phase 2 (Days 31-60): Process Implementation
- Establish systematic medical record review protocols
- Deploy AI-powered validation tools for real-time coding accuracy
- Create documentation templates aligned with CMS RADV requirements
Phase 3 (Days 61-90): Submission Preparation
- Validate all sampled enrollee records against documentation requirements
- Implement quality assurance workflows for RADV risk adjustment
- Prepare comprehensive audit response documentation
Key Metrics to Track for RADV Audit Success
MAOs tracking HCC validation and coding accuracy can reduce extrapolated clawbacks. RAAPID clients report 95 %+ audit-ready coding precision.
Technology Solutions to Streamline RADV Audit Preparation
RAAPID’s retrospective solution leverages advanced NLP to perform critical chart reviews, identifying missed or incorrect ICD-10/HCC codes, ensuring capture of appropriate reimbursement, accurate documentation, stronger compliance, and improved Risk Adjustment integrity.
RAAPID’s purpose-built AI-powered retrospective solution addresses core RADV audit challenges through:
- Identifying potential Adds (unclaimed) and Deletes (overclaimed) codes in the same tool using the MEAT framework
- Evidence-based code suggestions Approach
- Single streamlined workflow ensures quality & eliminates manual errors
- Converting unstructured data into structured insights with clinical context
- 3-level reviews before customer submission to CMS
RAAPID assists medical coders by bringing all stakeholders together for visible, rigorous, continuous improvement. We support all CMS-HCC Models as applicable for payment years 2018 through 2024 for contract validations as part of retrospective coding reviews.
RADV Readiness and Accountability For Health Plans
| Strategic Area | Key Actions for Payers (Health Plans) | Desired Outcome |
|---|---|---|
| Documentation & Coding | Develop clear documentation guidelines for external providers; Provide targeted HCC education and training programs for network providers; Emphasize "MEAT" criteria through educational materials and feedback. | Accurate, complete, and auditable medical records; Reduced unsupported diagnoses; Improved risk score accuracy. |
| Technology & Analytics | Invest in robust data exchange platforms for secure and efficient retrieval of medical records from diverse external EHR systems; Utilize AI/NLP/ML for retrospective chart review and claims data analysis to identify potential documentation gaps; Implement predictive analytics to identify high-risk provider groups or coding patterns. | Efficient data retrieval and validation; Proactive identification of compliance gaps; Enhanced ability to defend audit findings; Improved ability to analyze and validate claims data. |
| Internal Auditing | Conduct regular internal RADV audits, focusing on claims submitted by external providers; Perform thorough chart reviews by requesting records from network providers to validate diagnoses against CMS criteria. Implement internal audit workflows to track and manage diagnosis code accuracy across the network. | Continuous audit readiness; Early detection and correction of errors; Refined audit response processes; Improved overall audit readiness. |
| Audit Response | Develop a centralized system for requesting and tracking medical records from external providers for audit purposes; Assemble a dedicated audit response team with expertise in managing external provider data and communications; Establish clear protocols for timely submission of requested documentation and managing appeals with CMS. | Timely and accurate audit submissions; Effective defense against recoupments; Minimized financial penalties; Minimized administrative burden during audits. |
| Provider Engagement | Establish strong contractual agreements with providers that include clear expectations for documentation and data submission; Implement financial incentives for providers that demonstrate high-quality documentation and accurate HCC coding; Offer ongoing educational resources and direct feedback to providers on documentation improvement. | Improved provider documentation practices; Stronger collaboration between clinical and administrative teams; Shared responsibility for compliance; Mitigation of financial risk through shared accountability. |
Conclusion and Key Takeaways:
The $4.7 Billion Reality Check
The opening section reveals how CMS transformed RADV audits into existential financial threats, with contract-level extrapolation turning minor coding errors into multi-million-dollar disadvantages for Medicare Advantage Organizations.
New Regulatory Levers: Implications of the 2023 CMS Final Rule
This section outlines two pivotal regulatory changes that reframe audit risk by expanding the scope of extrapolation and retiring the FFS Adjuster mechanism.
Emerging Compliance Pressures
This aspect reveals an increasing complexity in coding historical charts, posing challenges to audit accuracy, particularly when validating six-year-old charts using outdated CMS-HCC v22 models. This is compounded by the fact that coding teams often lack experience with historical models, creating accuracy nightmares.
90-Day Survival Blueprint
This segment outlines a structured three-phase readiness framework: internal assessment and team training, systematic process implementation with AI tools, and comprehensive submission preparation for audit defense.
Technology that Safeguards Audit Efforts
RAAPID’s retrospective solution unites all stakeholders in a visible, continuous improvement journey. With human-like reasoning and machine-level efficiency, it leverages advanced NLP to convert unstructured clinical narratives into structured, audit-ready data, striking a balance between contextual accuracy and scalable processing efficiency. From evidence-backed AI-driven HCC code generation to intelligent workbooks for member prioritization, RAAPID delivers a powerful, collaborative platform for smarter risk adjustment.
Leadership Response Framework
The final section highlights strategic priorities for leadership to initiate proactive RADV compliance planning. Deploy AI-powered retrospective solutions and transform compliance threats into competitive advantages.
Bottom Line: MAOs that proactively address RADV readiness are more likely to mitigate audit risks and preserve financial stability. It discusses how leading MAOs are minimizing audit exposure and utilizing compliance-readiness as a strategic differentiator.
Delayed action could lead to significant recovery liabilities.
FAQs
A RADV (Risk Adjustment Data Validation) audit is a process conducted by the Centers for Medicare & Medicaid Services (CMS) to verify the accuracy of payments made to Medicare Advantage Organizations (MAOs).
No. This blog is scoped for RADV audits conducted by CMS, which validate Medicare Advantage risk-adjusted payments. OIG audits, on the other hand, are broader in scope and aim to prevent fraud, waste, and abuse across all HHS programs. Both audits are different, although they can sometimes overlap or be related.
Introduced extrapolation starting with PY2018 and eliminated the FFS Adjuster, increasing financial risk.
Based on contract size, audit history, or random selection, starting with PY2018 and expanding yearly.
For the PY2019 Contracted RADV audit, CMS is allowing the MAO to submit a maximum of twice the number of audited CMS-HCCs per sampled enrollee.
Common issues:
- Missing documentation
- Unsupported diagnoses
- HCC validation errors
- Coder inexperience
