RADV Audits: Taking a Proactive Approach in the Face of New Regulations

It’s no longer a question of if, but when. In May 2025, the Centers for Medicare & Medicaid Services (CMS) announced a more aggressive strategy for conducting Medicare Advantage Risk Adjustment Data Validation (RADV) audits.

In the past, a small selection of Medicare Advantage (MA) plans would be selected for RADV audits. Now, all eligible MA contracts will be audited. These audits can be intense and strenuous for health plans, and the financial consequences are steep.

This blog explores how health plans can stay ahead by identifying potentially over-coded conditions before CMS does.

The basics of RADV audits

Every year, CMS conducts RADV audits to validate the accuracy of risk adjustment data submitted by MA plans. Payments are tied to member diagnoses and reimbursements are adjusted based on risk score calculations.

If validation rates fall short, a plan’s risk adjustment factor (RAF) and reimbursement can be negatively impacted.

RADV audits are CMS’s primary way to recoup improper payments. During an audit, documentation is reviewed to confirm that the patient’s medical record supports any diagnosis submitted by an MA plan for risk adjustment.

In past years, CMS and the Department of Health and Human Services’ Office of Inspector General have targeted specific health conditions for focus during audits, sometimes earning them the nickname “The Dirty Dozen.” Currently, CMS has not indicated whether a similarly targeted approach will be used moving forward. This lack of specificity has introduced uncertainty for health plans, particularly regarding audit sampling methodology and preparation strategies.

What’s changing with RADV audits in 2025?

One of the most significant changes health plans will see immediately is that CMS will conduct audits of all eligible MA plans for each payment year in all newly initiated audits. Previously, only 60 plans out of the 555 plans were selected each year for a RADV audit.

Another big announcement is that CMS plans to catch up on an audit backlog dating back to plan year 2018. CMS’s goal is to complete this audit backlog by 2026. Some of the key parts of the plan include:

• Expanding the workforce: CMS’s team of medical coders will grow from about 40 to 2,000 by the end of the summer.
• Using new technology: CMS will deploy AI technology to enhance productivity in reviewing and flagging unsupported diagnoses. Little is currently known about the AI tool.
• Increasing audit volume: In addition to auditing all MA plans, CMS will also increase the number of audited records per health plan from 35 up to 200 members in a RADV sample, and audits will be completed on a compressed schedule – down to 12 weeks from 22 weeks.

Why being proactive matters more than ever

As CMS scales its auditing capabilities, health plans must adopt a more vigilant and proactive approach.

CMS is still extrapolating RADV audit findings across the audited health plans. Even small changes in validation rates can have significant ramifications.

While MA plans can’t control every audit variable, they can take action to reduce exposure. By identifying potentially unsupported codes and removing them if demonstrated to be invalid, plans can boost compliance, reduce RADV risk, and prevent costly errors.

Waiting for CMS to identify over-coded conditions is not an ideal situation for MA plans. That’s why it’s beneficial for plans to adopt a proactive approach to managing RADV risk with the assistance of clinically informed expert analytics.

How Inovalon supports RADV audit readiness

As CMS ramps up audits, administrative and compliance demands will only grow. Inovalon has a powerful suite of solutions designed to support health plans through every phase of RADV preparation.

In preparation for audits and to help avoid overcoded conditions, Inovalon’s Converged Risk Surveillance Analytics™ proactively identifies potentially unsupported diagnoses. These analytics work across the entire managed population to flag potentially overcoded conditions for further review. A reviewer can then confirm if the condition is overcoded and not submit to CMS, or in the event that the file was already submitted, a delete file can be submitted to have the condition removed and reduce audit risk.

Additionally, during a RADV audit, Inovalon’s Converged Record Review™ helps reviewers find the most clinically relevant information in a member’s medical records to validate what was submitted. The NLP within this software identifies the supporting documentation – saving reviewers time while surfacing the most relevant details to support the coded condition.

Together, these solutions help your medical review team focus on the charts that need the most attention, so you can approach audits with confidence, knowing nothing has been overlooked.

Get RADV audit ready

Don’t wait for CMS, stay ahead of the curve, and proactively manage claims with Inovalon’s regulatory and compliance expertise. Invest in effective risk adjustment software and develop a proactive approach to ensuring accurate risk scores.

Make the first move by contacting our team to learn how our cloud-based solutions can support your risk adjustment reporting processes.

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