Forging ahead after the Medicare Advantage RADV Final Rule

The industry reaction to the newly published Medicare Advantage Risk Adjustment Data Validation (RADV) Final Rule has been swift and vocal. Following the Centers for Medicare & Medicaid Services (CMS) announcement that the agency will extrapolate RADV audit findings beginning with payment year (PY) 2018, leading to potentially billions of dollars in penalties for healthcare payers over the next several years, AHIP President and CEO Matt Eyles issued this statement lauding the Medicare Advantage (MA) program while criticizing the new rule:

Our view remains unchanged: This rule is unlawful and fatally flawed, and it should have been withdrawn instead of finalized. The rule will hurt seniors, reduce health equity, and discriminate against those who need care the most. Further, the rule would raise prices for seniors and taxpayers, reduce benefits for those who choose MA, and yield fewer plan options in the future.

CMS’s publication of the final rule followed the recent release of numerous MA plan audits by the Department of Health and Human Services Office of Inspector General (OIG), which focused on high-risk diagnosis codes submitted by plans without proper supporting documentation.

The Alliance of Community Health Plans (ACHP), representing nonprofit regional health plans, also expressed severe concerns over the rule in a statement from ACHP President and CEO Ceci Connolly:

ACHP is concerned about the resources required of nonprofit regional health plans, which operate on small margins, in carrying out the requirements of the final rule, as well as the impact it will have on care for MA beneficiaries across the country. MA is the choice of America’s seniors, with over 30 million beneficiaries and growing. MA plans have fewer payment errors than traditional fee-for-service Medicare and are committed to meeting high standards of accountability in compliance with MA program requirements. These changes to the RADV audit process could disrupt care for enrollees and do not appropriately address program integrity.

CMS estimates it will recover $4.7 billion from MA plans between 2023 and 2032. The rule also eliminates the use of the fee-for-service (FFS) adjuster moving forward, which may negatively impact MA plans financially.

How should MA plans move forward in this new environment? Here are three strategies that will not only improve RADV audit outcomes but have a direct and positive impact on member care delivery.

  • Improve coding accuracy, specificity, and completeness. Health plans need to deploy many tools—ideally including advanced analytics, artificial intelligence, and natural language processing—for monitoring coding quality on a regular basis. Regular clinical coder training with a specific focus on high-risk diagnosis codes often flagged by CMS is also critical.
  • Invest in provider collaboration. MA plans should gain buy-in from their provider network to ensure provider documentation complies with HCC reporting requirements and properly demonstrates that conditions are evaluated, monitored, assessed, or treated during encounters. After conducting health risk assessments (HRAs), plans should also diligently follow up with a member’s primary care physician to help ensure any diagnoses identified by HRAs are properly addressed in the physician’s plan of treatment.
  • Deploy intelligent prospective member analytics. While retrospective analytics are critical to confirming previously submitted chronic conditions and conditions that were coded during a visit but may not have been present in the claim, prospective analytics allow earlier clinical intervention. This not only helps to close care gaps earlier, but enables plans to address gaps in clinical documentation sooner to address CMS concerns over diagnoses not being supported by the medical record.


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