November 27, 2018
The Centers for Medicare and Medicaid Services (CMS) will be extending its Risk Adjustment Data Validation (RADV) audits, which examine the accuracy of payments made to Medicare Advantage plans (Medicare Part C) and organizations that provide them.
Under the new rule, the audits will calculate the accuracy of a plan’s risk adjustment conditions and validate hospital inpatient and outpatient records along with provider medical records to adjust federal Medicare payments to the plan accordingly.
Medicare RADV audits verify that the amount of money the federal government pays to a single Medicare Advantage plan is appropriate according to the health care costs that are incurred by the plan’s members.
As many as 201 plan enrollees from each Medicare Advantage plan contract may be selected for an audit. The selected members are ranked based on clinical data regarding their health risks. Any potential payment errors are then calculated for each beneficiary, which are then used to calculate an overall payment error rate for the plan.
CMS estimates that RADV audits from 2011 to 2013 resulted in the recovery of $650 million in improper Medicare payments to Medicare Advantage plans. Going forward, RADV audits could recover an average of $435 million per year.
The recovery of improper Medicare payments is important, as it helps the federal government save money. By reducing improper Medicare payments from fiscal year 2017 to 2018, the federal Medicare program saved $4.59 billion.
The share of Medicare beneficiaries enrolling in Medicare Advantage plans is on the rise. In 2019, the number of beneficiaries enrolled in Medicare Advantage is projected to reach almost 40 of all Medicare beneficiaries, and there was a 20 percent increase in the number of available Medicare Advantage plans from 2018 to 2019.
The CMS stated that the Medicare RADV audits do not have an impact on the cost of Medicare Advantage plans, but the audits will ultimately generate savings for the Medicare Trust Fund.