How to Prepare for CMS’s New RADV Audit Plans in 2025
The CMS recently made an announcement about a major expansion in Risk Adjustment Data Validation (RADV) audits for 2025. It aims to ensure that all Medicare Advantage plan payments comply with federal requirements. Healthcare professionals and Medicare Advantage Organizations (MAOs) need to be prepared for this change ahead of time so they can effectively address the difficulties of healthcare audits. In this blog, we’ll explore what RADV audits entail, their objectives, changes in 2025 compared to previous years, and actionable steps to prepare, with Shoreline Medical Billing Company as your partner in compliance.
Shoreline Healthcare Technologies is a trusted leader in medical billing and compliance; We are always audit-ready and offer tailored solutions to help you stay ahead.
Understanding RADV Audits: What Are They, and Why Do They Matter?
What is a RADV Audit?
It is an audit conducted by the CMS to verify the accuracy of payments made to Medicare Advantage (MA) plans, to make sure that the diagnoses submitted by MAOs for payment are supported by medical records and proper documents to prevent overpayments due to inaccurate coding. They cross-verify the diagnosis codes with patient records; by doing so CMS aims to identify and recover improper payments and safeguard public funds.
When Did RADV Audits Begin?
The CMS launched this as a pilot program initially in the year 2004 to check the accuracy of risk adjustment data submitted by Medicare Advantage organizations is accurate and properly documented. The audits serve to confirm whether the actual conditions of the patients reflect with the adjusted payment so that the Medicare funding is not wasted.
Over the years CMS had refined its audit methodology with the establishment of Payment Error Rate Measurement (PERM) program and the Fee-for-Service (FFS) Adjuster, which accounts the differences in documentation standards between MA and traditional Medicare. However, in 2023, CMS finalizes a rule eliminating the FFS Adjuster, and allowing broader extrapolation of the audit findings.
What do you mean by Medicare Advantage Plan?
These are health insurance plans provided by private insurance companies with the approval of CMS by combining the hospital insurance (Part A), medical insurance (Part B), and the prescription drugs (Part D) into a single plan are known as Medicare Part C or Medicare Advantage Plans. Some of these plans may also offer extra benefits like dental, vision, or hearing coverage. Instead of getting Medicare coverage directly through the federal government, beneficiaries who enroll in a Medicare Advantage Plan get their benefits through a private insurance company contracted with CMS.
Key features of MA Plans
These plans typically operate within a network of providers by using in-network doctors for lower costs and they may also include an annual out-of-pocket expense. Enrollees are required to pay a monthly premium plus the Part B premium, along with copays or coinsurance, often resulting in lower out-of-pocket costs than original Medicare.
- It gives a comprehensive coverage, by including the hospital stays, doctor visits, and often even the prescription drugs.
- Most plans have specific providers or networks, though some allow out-of-network care at higher costs.
- It requires a payment of monthly premium (in addition to the Part B premium), plus copays or coinsurance for services. So, these Plans may incur lower out-of-pocket expenses than original Medicare.
Key Changes in CMS’s 2025 RADV Audit Strategy
The CMS is lagging in conducting these audits. The audits for the payment year 2018-2024 is still pending. To increase this, and complete the backlogs by early 2026 they have announced major changes in its audit methodology this year.
- Increase in the Audit Volume: Initially CMS was auditing only from a small sample of MA plans. But from this year onwards it will conduct audit to all the eligible MA contracts. So the audit volume is increased from 60 to nearly 550.
- Workforce Expansion: It has also planned to increase the number of medical coders from 40 to 2,000 by September 1, 2025, to handle the audit backlogs.
- Enhanced Technology: By using advanced technology like leveraging AI and advanced automated systems to flag unsupported diagnoses they can audit huge volumes efficiently.
- Extrapolation: Applying error rates across the entire MA contracts, with projected recoveries of $4.7 billion from 2023–2032, including $428.4 million net for PY 2018 in 2025.
- Collection of Overpayments: They have also planned to collect all the overdue occurred due to overpayments from the PY 2018-2024.
With these new strategies in force all providers and MAOs must face the increased financial and administrative risks. We at Shoreline Healthcare Technologies are always ready to help practices mitigate these risks through our expert billing software and compliance support.
When is the Audit Conducted Each Year?
These audits are not conducted on a fixed date annually, but they generally follow a rough annual cycle and hence providers must be audit-ready year-around.
| Timeframe | Audit Phase |
| Q1 – Q2 (Jan–June) | CMS identifies and sends notices to the Medicare Advantage contracts for audits. |
| Q2 – Q3 (April–August) | CMS will send request for medical record to which the providers must respond within 45–60 days. |
| Q3 – Q4 (July–Dec) | CMS contractors review the documents, assess errors, and calculate the risk score discrepancies |
| Following Year | CMS finalizes extrapolations and issues repayment notices; the contractors may appeal further. |
CMS has announced that the next RADV audit cycle will begin in Q3 2025, with notifications to selected MA organizations expected by August 2025. Pre-audit notices and data validation requirements will start rolling out as early as July 2025, meaning preparation must begin now.
Things to take care in RADV Audit Preparation
Preparing for RADV audits needs a proactive and multi-faceted approach. Let us have a look at the critical areas to focus on:
1. Robust Documentation Practices
Accurate and comprehensive medical record documentation is the cornerstone of RADV audit success. All records should meet specific standards:
- Legibility: Ensure records are clear and readable.
- Correct Year: Documents must correspond to the payment year which is audited.
- Face-to-Face Encounters: Only diagnoses from in-person visits are accepted.
- Patient Identification: Include the patient’s name and date on every page.
- Provider Authentication: Records must include the physician’s signature and credentials.
- ICD-10-CM Accuracy: Codes must align with documented conditions.
2. Accurate HCC Coding
Errors in HCC coding, such as upcoding or unsupported diagnoses, are the prime areas of audit targets. Over-coding high-risk diagnoses (e.g., chronic kidney disease) without supporting documentation or coding conditions not treated in the audit year may result in penalties.
3. Data Validation and Submission
MAOs must submit accurate risk adjustment data to CMS’s Encounter Data Processing System (EDPS) or Risk Adjustment Processing System (RAPS). Errors in data submission can trigger audits.
4. Provider and Staff Training
We have to teach the healthcare providers and billing staffs regarding the audit protocols and need for proper documentation. Identifying and correcting the high-risk coding pattern is critical to maintaining compliance.
5. Technology Support
Advanced technology can streamline audit preparation and improve validation rates. Tools like AI and Natural Language Processing can be used to find coding errors and suggest documentation improvements.
6. Internal Audits and Mock Reviews
Conducting quarterly internal audits that mimics CMS’s process can help in identifying the vulnerabilities before an official audit.
Challenges and Risks of Non-Compliance
Failing to prepare for RADV audits can lead to penalties, reputational damage, increased scrutiny, and administrative burdens.
- ✔ Extrapolated overpayments can result in millions in repayments.
- ✔ Non-compliance may harm a practice’s credibility with payers and patients.
- ✔ Audit failures trigger further reviews by CMS or OIG.
- ✔ Responding to record requests and appeals can strain resources.
Best Practices for RADV Audit Compliance
To avoid the risk of penalties and overpayments in audits and to maintain compliance, we can implement these ideas
- ✔ We can appoint a Compliance Officer, a knowledgeable person to oversee RADV and other audit preparations.
- ✔ By using AI-driven tools we can streamline the coding accuracy and documentation.
- ✔ Keeping staff updated on CMS regulations and coding guidelines by giving them regular training.
- ✔ Performing Mock RADV Audits to identify and address the areas of weaknesses.
- ✔ Stay informed on the policy changes via CMS’s website and Federal Register notices.
By Partnering with Experts like Shoreline Healthcare Technologies for comprehensive audit support, from data validation to submission management.
How Shoreline Medical Billing Company Can Help
Shoreline Healthcare Technologies specializes in helping healthcare providers navigate RADV audits and other healthcare audits. Our services include
- ✔ AI-Powered Coding Solutions to validate HCCs and flag errors in real-time.
- ✔ We offer Comprehensive Training to educate providers and staff on CMS regulations and documentation standards.
- ✔ We help in Audit Preparation by conducting mock audits and help you to manage data submissions in accordance with the compliance.
- ✔ We use Data Analytics to Identify high-risk diagnoses and optimize risk adjustment submissions.
- ✔ We Provide expert guidance to reduce penalties and get maximum reimbursements.
By partnering with Shoreline, healthcare providers can confidently face the 2025 RADV audit expansion.
The upcoming RADV audit expansion marks a new era of accountability for Medicare Advantage plans and healthcare providers. By understanding the history, purpose, and requirements of RADV audits, and preparing diligently, we can mitigate risks and provide better patient outcomes.
Sharanya Rajmohan
Content Writer
Sharanya brings clarity to the complexities of medical billing and healthcare regulations. With a knack for turning industry shifts into straightforward, actionable insights, her blogs help readers stay informed without the jargon.
For more information on preparing for RADV audits, Contact Shoreline Healthcare Technologies.