An initiative by the Centers for Medicare & Medicaid Services (CMS) to audit Medicare Advantage (MA) plans is back on, aiming to identify overpayments to health plans which may in turn query physicians.
The audits were previously paused following a U.S. District Court ruling in Texas last September. Jan. 27 CMS memo said despite the agency’s intention to fully comply with that September court order, it appealed the decision in November and will now be pursuing upcoming risk adjustment data validation (RADV) audits of insurers providing MA plans, starting with performance year 2020 audits this month.
The Texas Medical Association remains concerned MA plans could potentially increase medical record requests and audits for physicians in their networks, especially those participating in risk-based contracts.
After CMS first announced the audits last May, TMA informed its members it was monitoring the agency’s actions to determine whether the process was unfairly penalizing physicians.
TMA suggests physicians review their contracts with MA health plans for any policies regarding recoupment and what it deems an overpayment. Although CMS is auditing health plans and holding them responsible for refunding any overpayments, those insurers may then try to recover the funds from contracted physicians and physician groups.
Physicians caring for patients with MA plans should continue to follow TMA’s guidance in order to prepare for any potential requests stemming from the CMS audits:
- Using correct CPT codes and make sure they reflect medical necessity;
- Determining that any diagnosis code use is to the highest specificity; and
- Confirming documentation supports any use of “hierarchical condition category” risk adjustment codes.
MA plans receive risk-adjusted payments from CMS based on diagnoses physicians submit for patients, with higher payments for treatment of patients with more serious or chronic conditions. CMS maintains RADV audits determine whether medical records support the diagnoses.
“Currently, CMS is several payment years behind in completing RADV audits,” the agency explained in its memo, as the last significant recovery of overpayments occurred via an audit of the payment year 2007. For CMS audits for 2011 through 2013, with overpayment rates between 5% to 8%, the agency says payment recovery will begin soon, without specifying the dollar amount for those years.
Federal estimates currently suggest unsupported diagnoses cost $17 billion in overpayments annually.
TMA’s Physician Payment Resource Center is available to help physicians with MA plan audit issues and can also help physician offices become more efficient in billing, coding, and securing payment.
CPT Copyright American Medical Association. All rights reserved.
Last Updated On
February 13, 2026
Originally Published On
February 13, 2026
Phil West
Associate Editor
(512) 370-1394
phil.west[at]texmed[dot]org
Phil West is a writer and editor whose publications include the Los Angeles Times, Seattle Times, Austin American-Statesman, and San Antonio Express-News. He earned a BA in journalism from the University of Washington and an MFA from the University of Texas at Austin’s James A. Michener Center for Writers. He lives in Austin with his wife, children, and a trio of free-spirited dogs.