Trump administration’s appeal of vacated RADV rule indicates Medicare Advantage audits not going away

By Brian Murphy

Nothing is over. We’re still deep in the wild west of Medicare Advantage (MA).

In case you missed the breaking news over the Thanksgiving break, the Trump administration on Friday appealed a crucial court decision. In September a TX judge ordered the 2023 Risk Adjustment Data Validation (RADV) rule vacated, removing CMS’ audit fangs including tougher audit standards and extrapolated penalties that could have cost MA insurers billions.

Humana sued, claiming the 2023 RADV rule held MA plans to unfair FFS standards and moreover did not allow for proper preparation. In a huge win the judge ruled in Humana’s favor. MA plans rejoiced.

But CMS isn’t going away quietly. It knows MA payments are a major problem. According to the Medicare Payment Advisory Commission, MA plans receive 20% to 22% more per patient than traditional Medicare, driven by factors like favorable selection (enrolling healthier people) and higher “coding intensity” (recording more diagnoses for higher risk scores). Per the Healthcare Dive article below, Medicare will pay $84 billion more on MA beneficiaries than it would if those beneficiaries were in the traditional fee-for-service program.

You may recall CMS was poised to begin a huge MA audit rollout that included hiring 2,000 coders, beefing up its AI audit software, and extrapolating audit findings. It still may, if its appeal is ultimately successful.

Regardless of how this shakes out we’re in a new era for MA. One of greater accountability. Of revenue integrity as opposed to maximization. Of accuracy of code assignments, and of clinical validity.

No more “turning up the gas” on HCC assignment as one MA plan leader said, years ago. It’s now about making sure the MEAT is well done (sorry, I couldn’t resist).

The codes must be defensible. I’m about to release a new podcast with an outpatient CDI Director whose biggest pet peeve are queries issued merely because the patient had the condition in a prior year or a prior visit. While certainly valid in many circumstances, patient history does not preclude the need to ensure the condition is being monitored/evaluated/assessed/treated … else why should payment be rendered?

CMS is asking that very question.

If you want to learn more about the wild swings of momentum of the embattled MA program stop by the Norwood resources page, where I in conjunction with my colleague Jason Jobes have put together a must-read special report. It’s free, an interesting read, and contains:

• The latest MA updates and tumultuous timeline
• What a fictitious but likely extrapolated audit might look like
• Outpatient CDI strategies
• A 12-step MA optimization checklist to tack to your wall (physical or digital) to keep on the right side of compliance in 2026.

References
• Norwood, Wild West of Medicare Advantage.
• Healthcare Dive, Trump administration appeals decision vacating Medicare Advantage audit rule