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 and their networks are inflating patients’ illnesses, leading to overpayments – and the additional compliance burdens and possible repayments could fall on physicians. 

The Texas Medical Association is monitoring whether the process unfairly penalizes physicians and asks members to contact its Physician Payment Resource Center (PPRC) for coding and billing assistance, and to report any payment recoupments.   

As of its announcement May 21, CMS says it has begun to review all eligible contracts with Medicare Advantage health plans 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 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 medical record requests and audits for their network physicians, especially those participating in risk-based contracts, says Carra Benson, TMA’s director of physician payment services. 

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 so-called Risk Adjustment Data Validation (RADV) audits to confirm diagnoses used for payments are supported by medical records.  

CMS says it 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. 

While CMS’ focus is on health plans, physicians may experience downstream pressure from these changes as well. Ms. Benson recommends physicians:  

• Ensure they’re using the correct CPT codes and those codes reflect medical necessity; 

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

• Confirm documentation supports any use of “hierarchical condition category” risk adjustment codes. 

While CMS seeks to ultimately hold the health plan responsible for the overpayment, many Medicare Advantage contracts allow plans to recoup overpayments from contracted physicians or groups. Physicians are encouraged to review their contracts and provider agreements for clauses related to audit liability or clawbacks, seeking clarity regarding their potential exposure and due process rights in the event of a dispute.  

Physicians should also be aware that more frequent and expansive RADV audits may increase the risk other compliance-related enforcement, such as False Claims Act investigations, and potential liability for Medicare Advantage plans and their physician networks.   

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. 

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