Medicare Advantage Risk Adjustment Data Validation (RADV) final rule

On February 1, 2023, the Centers for Medicare and Medicaid Services (CMS) published a final rule (Final Rule) to “outline [its] audit methodology and related policies for the contract-level MA Risk Adjustment Data Validation (RADV) program.” In announcing publication of the rule, HHS Secretary, Xavier Becerra, said that the department was “taking long overdue steps to conduct audits and recoup funds.” The rule, which finalizes policies related to extrapolation for audits and without a fee-for-service (FFS) Adjuster, is the latest round in a more than decade-long conflict between the health insurance industry and HHS over how Medicare Advantage (MA) plan risk adjustment should be audited and how overpayments to those plans should be “clawed back.”

This Center for Healthcare Regulatory Insight Brief summarizes the history of the RADV program, policies in the Final Rule, and early industry reactions. The brief also prompts CMS to consider expanding its use of emerging standards for interoperable data exchange to streamline and address remaining limitations of the RADV process.