TMA Vigilant of New Medicare Advantage Audits
By Alisa Pierce

The Centers for Medicare and Medicaid Services (CMS) has begun what the agency itself calls an “aggressive” new strategy to audit all Medicare Advantage plans annually to review whether insurers are inflating patients’ illnesses, leading to overpayments – and the burden of compliance and possible repayments will likely fall on physicians. 

The Texas Medical Association is monitoring the process to ensure physicians are not unfairly penalized and asks members to contact its Physician Payment Resource Center (PPRC) for coding and billing assistance.  

TMA can help physician members with the auditing process, from documentation review to payment disputes, says PPRC Director Carra Benson. “Physicians don’t have to tackle this alone.” 

As of its announcement May 21, CMS says it has begun to review all eligible Medicare Advantage contracts each payment year in newly opened audits. Additionally, the agency indicated it has expanded its review process to expedite the completion of audits for payment years 2018 through 2024 – and is using technology like artificial intelligence (AI), among other methods TMA is concerned with, to do it. 

CMS stated in its news release it is several years behind in completing these audits. Consequently, to keep pace with the agency’s plan to expand the frequency, number, and depth of the audits, Medicare Advantage plans will likely increase their medical record requests, Ms. Benson says. 

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

Physicians who appeal or dispute CMS’ findings will not only need to take time away from patients to review documentation, but also to ensure they understand the process of extrapolation, Ms. Benson says. 

Extrapolated audits, she explains, can result in larger repayments, based only on a small set of data. For example, if an auditor reviews a sample of 100 claims out of a total of 10,000 from that physician and finds all 100 claims from the reviewed sample included wrong diagnoses, the auditor would assume all 10,000 claims are incorrect – possibly leading to higher repayment amounts. 

CMS says it plans to extrapolate all its newly initiated audits and its backlog of reviews from earlier payment years. The agency will also increase its team of medical coders from 40 to around 2,000 by Sept. 1, and use “enhanced technology” in its review process, per CMS – or, Ms. Benson suspects, use AI. 

“By leveraging technology, CMS will be able to increase its audits,” the agency stated in its press release. “This will help ensure CMS’ audit findings are more reliable and can be appropriately extrapolated as allowed under the RADV final rule.” 

In addition to these efforts, CMS says it will work with the Department of Health and Human Services Office of Inspector General to recover uncollected overpayments identified in past audits, and plans to complete audits from past payments years by early 2026. 

As TMA monitors the audits, Ms. Benson recommends physicians: 

• Ensure they’re using the correct CPT codes; 

• Check any diagnosis code they use is to the highest specificity; and  

• Ask CMS to utilize all a physician’s claims if audited, rather than using extrapolation on a specific subset. 

Additionally, she suggests physicians contact CMS about what role AI played in determining its audit results, especially if they choose to appeal.  

“In your appeal, specifically mention AI and ask how [CMS] used it to determine their results. This may increase the likelihood that CMS revisits the agency’s use of technology for these audits,” and could add meaningful insight into the agency’s methods, Ms. Benson said. 

Visit the PPRC webpage on the TMA website to request help with Medicare Advantage audits, the appeals process, and more. And check out its billing and coding tips for physicians.