In May 2025, the Centers for Medicare & Medicaid Services (CMS) surprised many health plans by announcing sweeping changes to its Risk Adjustment Data Validation (RADV) audit program.
With these changes, all eligible Medicare Advantage contracts will be audited annually, the number of audited contracts each year will increase by 900% and the average number of enrollees sampled in each audit is expected to increase 571%.
Other changes aim to clear out the backlog of RADV audits and expand staff and technology investments to accommodate more audits. CMS correctly described these changes as aggressive.
The bottom line is that payer organizations should expect to see RADV audits that are both more frequent and more in-depth. As such, it’s important to know what a RADV audit is and the role it plays in maintaining the integrity of the risk adjustment process.
The RADV program lies at the core of efficient healthcare management. It is an essential mechanism utilized by CMS to rectify improper payments within Medicare Advantage plans.
The RADV program relies on a sophisticated risk adjustment payment model, emphasizing the accurate reporting and coding of patient risk, ultimately enabling healthcare providers to predict individual care costs more accurately and allocate resources efficiently.
Effective risk adjustment is vital to ensure fair and adequate compensation for health plans, as well as to make sure beneficiaries are enrolled in plans that suit their specific healthcare needs. Compliance plays a crucial role in minimizing payment errors, fostering a more effective, transparent and equitable healthcare system.
By adhering to the compliance protocols during risk adjustment audits, healthcare providers can significantly enhance their service delivery and overall operational efficiency.
CMS conducts two distinct types of RADV audits to maintain the integrity of the system:
Data errors flagged during a RADV audit can lead to substantial financial penalties, which can significantly impact the sustainability of healthcare organizations and insurance providers. Legal implications resulting from these errors can tarnish an organization’s reputation and erode the trust of patients and stakeholders.
Increased regulatory scrutiny from risk adjustment audits may also divert resources from core activities, leading to operational inefficiencies and increased operational costs, ultimately affecting the overall quality of patient care. Furthermore, the types of errors that may be discovered during a RADV audit also suggest inaccurate medical records that could negatively impact patient care.
Although the prospect of increased audits may seem daunting and burdensome, there is support available to help your organization throughout the audit process. At Optum, you will find an experienced team that has been helping organizations navigate the RADV process since CMS initiated audits in 2008. Optum RADV experts include:
Learn more about the support Optum offers for RADV and other audits.
Maintaining accurate data is not merely a regulatory requirement. It is a strategic imperative for healthcare organizations aiming to ensure their long-term sustainability and financial stability.
By prioritizing accurate diagnoses, coding and documentation, healthcare providers can foster trust, allocate resources appropriately and enhance the overall quality of patient care in an increasingly complex and demanding healthcare environment. Adhering to data accuracy protocols should be seen as a strategic investment in building a robust, efficient and trustworthy healthcare ecosystem.
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1. Centers for Medicare & Medicaid Services. CMS Rolls Out Aggressive Strategy to Enhance and Accelerate Medicare Advantage Audits. Published May 21, 2025.
2. James, Melissa. Seven Lessons from a Contract-Level RADV Audit. Rise. Feb. 14, 2022.
