On October 26, 2018, the Centers for Medicare and Medicaid
Services (CMS) issued a proposed rule that will, among others
initiatives, allow CMS to recover higher dollar amounts of improper
payments made to Medicare Advantage
Organizations.1
Improper payments are identified through Risk Adjustment Data
Validation (RADV) audits, which are audits conducted to determine
whether the risk adjusted payments submitted by Medicare Advantage
Organizations are for diagnoses supported by proper documentation.
If there are any improper payments based on these audits, CMS is
able to recover those payments.
In 2012, CMS issued a final RADV audit methodology that
calculated the payment error rate using a small sampling of data
across patients covered by various Medicare Advantage plans and
then extrapolated that error rate to the entire population covered
by that plan to determine whether the insurer had received an
aggregate overpayment. The methodology provided for
