The Centers for Medicare and Medicaid Services (CMS) has announced a sweeping initiative to intensify audits of Medicare Advantage (MA) plans, a move that marks a major shift in oversight. As improper payments continue to rise, CMS is scaling its auditing efforts to ensure accuracy, accountability, and program integrity—placing both insurers and providers under greater scrutiny.
What’s Changing?
Beginning in 2025, CMS will conduct annual audits of every Medicare Advantage plan. This is a significant expansion from its previous practice of auditing roughly 60 plans per year. The change comes amid growing concern over billions of dollars in improper payments tied to unsupported or inflated diagnoses.
Key changes include:
- Increasing audit staff from 40 to 2,000 employees
- Leveraging enhanced technology to accelerate reviews and reduce backlogs
- Expanding record reviews per plan from 35 to as many as 200 records annually
- Conducting look-back audits for payment years 2018 through 2024
CMS aims to complete its backlog of audits and implement a robust, forward-looking auditing framework that holds MA organizations accountable for accurate billing and diagnoses.
Why It Matters
CMS’s expanded oversight comes on the heels of multiple reports from the Office of Inspector General (OIG) identifying billions of dollars in overpayments due to unsupported diagnoses. The agency estimates that MA plans are overpaid by as much as $17 billion per year, while watchdog groups estimate the figure could exceed $80 billion annually.
For providers, this means medical records will play a more critical role than ever in validating claims and justifying payments. The Risk-Adjustment Data Validation (RADV) audit process relies on detailed, accurate documentation to confirm that billed services reflect the actual condition and care provided to patients.
Implications for Providers
While the audits primarily target insurers, providers will likely experience:
- Increased requests for medical records
- Greater emphasis on documentation accuracy and risk coding compliance
- More pressure from MA organizations to justify diagnostic coding
Providers should prepare by strengthening their internal compliance programs, conducting regular documentation audits, and investing in coder education and training.
Conclusion
The message from CMS is clear: accountability in Medicare Advantage is no longer optional. With every plan under annual audit and the stakes higher than ever, providers must be proactive in maintaining accurate records, compliant billing practices, and a strong understanding of risk-adjusted reimbursement.
Need help getting started? Contact MedCycle Solutions for expert guidance and audit-ready support.