The Centers for Medicare and Medicaid Services (CMS) is issuing, what will amount to be, very significant Risk Adjustment Data Validation (RADV) Audit notices for PY2018 to Medicare Advantage Organizations (MAOs).

These notices follow the issuance of CMS’s final rule (88 Fed. Reg. 6643 (Feb. 1, 2023), amending 42 C.F.R. 422.310(e). Pursuant to the rule, CMS has the authority to extrapolate audit findings for PY2018 and beyond. CMS has noted that the extrapolation methodology it adopts for RADV audits will be focused on MAO contracts that, through statistical modeling and/or data analytics, are identified as being at the highest risk for improper payments. If imposed, CMS will share with MAOs its extrapolation methodology. Thus far, little is known about the cohort /universe selected by CMS that this extrapolation may apply to. CMS previously moved from a randomized contract wide universe to a focused disease-specific sampling methodology.

Stay tuned for what will ultimately be the highest stakes RADV audits to date.