The CMS Medicare Advantage Audits

The CMS Medicare Advantage Audit Press Release:

https://www.cms.gov/newsroom/press-releases/cms-rolls-out-aggressive-strategy-enhance-and-accelerate-medicare-advantage-audits

CMS Rolls Out Aggressive Strategy to Enhance and Accelerate Medicare Advantage Audits
Agency Will Begin Auditing All Eligible Medicare Advantage Contracts Each Payment Year and Add Resources to Expedite Completion of 2018 to 2024 Audits

May 25, 2025

Today, the Centers for Medicare & Medicaid Services (CMS) announced a significant expansion of its auditing efforts for Medicare Advantage (MA) plans. Beginning immediately, CMS will audit all eligible MA contracts for each payment year in all newly initiated audits and invest additional resources to expedite the completion of audits for payment years 2018 through 2024.

“We are committed to crushing fraud, waste and abuse across all federal healthcare programs,” said Dr. Mehmet Oz, CMS Administrator. “While the Administration values the work that Medicare Advantage plans do, it is time CMS faithfully executes its duty to audit these plans and ensure they are billing the government accurately for the coverage they provide to Medicare patients.”

Medicare Advantage plans receive risk-adjusted payments based on the diagnoses they submit for enrollees—meaning higher payments for patients with more serious or chronic conditions. To verify the accuracy of these claims, CMS conducts Risk Adjustment Data Validation (RADV) audits to confirm that diagnoses used for payment are supported by medical records.

Currently, CMS is several years behind in completing these audits. The last significant recovery of MA overpayments occurred following the audit of payment year (PY) 2007, despite federal estimates suggesting MA plans may overbill the government by approximately $17 billion annually. The Medicare Payment Advisory Commission (MedPAC) estimates this figure could be as high as $43 billion per year. CMS’s completed audits for PYs 2011–2013 found between 5% and 8% in overpayments.

To address this backlog, the Trump Administration has introduced a plan to complete all remaining RADV audits for PY 2018 to PY 2024 by early 2026. Key elements of the plan include:

Enhanced Technology: CMS will deploy advanced systems to efficiently review medical records and flag unsupported diagnoses.

Workforce Expansion: CMS will increase its team of medical coders from 40 to approximately 2,000 by September 1, 2025. These coders will manually verify flagged diagnoses to ensure accuracy.

Increased Audit Volume: By leveraging technology, CMS will be able to increase its audits from ~60 MA plans a year to all eligible MA plans each year in all newly initiated audits (approximately 550 MA plans). CMS will also be able to increase from auditing 35 records per health plan per year to between 35 and 200 records per health plan per year in all newly initiated audits based on the size of the health plan. This will help ensure CMS’s audit findings are more reliable and can be appropriately extrapolated as allowed under the RADV final rule.

In addition to these efforts, CMS will collaborate with the Department of Health and Human Services Office of Inspector General (HHS-OIG) to recover uncollected overpayments identified in past audits. CMS reaffirms its commitment to ensuring all Medicare Advantage plans comply with federal requirements and accurately report patient diagnoses used for payment.

It appears that AHIP has enough Republican U.S. Senators kowtowing to kill off any changes in Medicare Advantage.  Dr. Oz will certainly get the message:

https://www.politico.com/live-updates/2025/06/10/congress/republicans-back-off-medicare-changes-in-gop-megabill-00397594

Republicans back off Medicare changes in GOP megabill
An effort to get savings from reforms to popular Medicare Advantage plans is failing to gain ground in the Senate.

By Jordain Carney and Robert King - June 10, 2025

Senate Republicans appear to be popping their own trial balloon on including changes to Medicare as part of their “big beautiful bill.”

The public shift comes after GOP senators caught their own colleagues off guard — and gave Democrats a new political target — when they opened the door last week to going after “waste, fraud and abuse” within the program to capture savings to satisfy their deficit hawks.

But Sen. Kevin Cramer (R-N.D.), who raised the concept after a closed-door conference meeting last week, said in a brief interview Tuesday that he now doesn’t expect Republicans to actually grab one of their third rails as an offset for President Donald Trump’s sweeping megabill.

When asked if he expects Medicare changes to make it into the massive tax and spending package, Cramer replied, “I don’t know that I do. There aren’t many of us courageous enough to talk about it.” He also acknowledged that his previous remarks sparked “a lot of angst.”

Republicans also last week floated potentially including bipartisan legislation from Sens. Bill Cassidy (R-La.) and Jeff Merkley (D-Ore.) that would target overpayment in Medicare Advantage plans, which enables older Americans to buy private plans offering health coverage. It could lead to tens of billions of dollars in savings.

Many GOP senators, however, raised concerns publicly and privately about including language from that bill as part of the larger tax and spending package.

Sen. Josh Hawley (R-Mo.) said Tuesday he’d spoken with Trump directly and the president wasn’t in favor of doing anything on Medicare.

“He said people who play around with Medicare lose elections,” Hawley said.

The major insurance industry group AHIP also weighed in, warning that the bill would lead to higher costs and reductions in benefits. Moderates in the House also sounded the alarm bells that Senate Republicans appeared to be reviving an idea they had earlier rejected as a pay-for in their version of the legislation.

Even members of the Senate Finance Committee poured cold water on the likelihood that it would be included in draft text their panel could release as soon as Friday. The pushback isn’t based on opposition to the proposal itself but questions about if the megabill is the right venue to advance this particular policy.

“There is a lot of work to be done to make sure you don’t have unintended consequences. But I think that is an area for longer-term gain. I don’t know that you can necessarily, in the horizon that we’re operating [in], be able to book some of the savings that may be out there,” said Sen. Thom Tillis (R-N.C.) about the Cassidy-Merkley measure specifically.

Asked if he expected it would be included in the legislation, Sen. John Barrasso (R-Wyo.), the Senate majority whip and a member of the Finance Committee, instead said it would be in the conference’s “discussions.”

Republicans will meet Wednesday to receive a briefing by GOP senators crafting outstanding portions of the bill, including Finance Chair Mike Crapo (R-Idaho).

Cassidy’s office did not immediately return a request for comment on the status of discussions around his policy proposal, but he has previously said his legislation does not cut benefits. Rather, he has argued it would remove tools that Medicare Advantage plans employ to garner higher payments from the federal government by making patients appear sicker than they actually are.

“This addresses an issue both Republicans and Democrats have called waste, fraud and abuse,” Cassidy said Friday.