Blog List

Understanding CMS’s Contract-Level RADV Audits: Payment Error Exposure, Extrapolation, and Plan Liability Explained

As CMS accelerates its oversight of Medicare Advantage Organizations (MAOs), contract-level RADV audits are taking center stage. These audits aren’t just about compliance—they’re about real financial exposure, rooted in complex methodologies like extrapolation and payment error estimation.

CMS's Intent: Closing the Oversight Gap

After years of limited recoveries, CMS is moving to complete all outstanding RADV audits for Payment Years 2018–2024 by early 2026. This means seven years of risk adjustment data will be reviewed under contract-level scrutiny. If your plan hasn’t modernized its audit defenses, now is the time.

 What Contract-Level RADV Really Means

Per CMS’s updated guidance (see: FAQ on Contract-level RADV, Dec 2023), audits are no longer confined to member-level discrepancies. Instead, CMS will calculate payment error rates across a statistical sample of enrollees, then apply extrapolation across the full contract population. This has major implications:

  • MAOs could be liable for millions in overpayments based on extrapolated error rates—even if only a small percentage of sampled records contain errors.

  • CMS has confirmed it is not required to disclose all potential extrapolation inputs in advance.

  • There is no appeal available for methodological decisions like the choice of sampling or error rate formulas.

The Extrapolation Formula: A High-Stakes Equation

In its Payment Error Calculation Methodology document, CMS outlines how it:

  • Identifies non-valid HCCs not supported by chart documentation

  • Calculates per-member risk score errors, adjusting for demographic weight

  • Applies midpoint estimates to extrapolate the total dollar impact

  • Uses this extrapolated error to calculate contract-level recoveries

This means that one unsupported diagnosis—if replicated across a contract’s population—can balloon into a multi-million-dollar liability.

Are You Ready for 7 Years of RADV Scrutiny?

Ask yourself:

  • Are your HCCs fully supported by clinical documentation?

  • Do you have automated controls in place to prevent leakage?

  • Are your audit charts strategically selected and defensible?

If not, it’s time to upgrade your approach.

Why Manual Chart Review Workflows Are No Longer Enough

Many health plans still rely on outdated, disconnected processes:

  • Manual chart pulling

  • Siloed submission validation

  • Reactive audit defenses

This results in missed HCCs, documentation gaps, and failed RADV audits.

Meet Health Data Max – AI-Powered RADV Audit Resilience

Our purpose-built Risk Adjustment platform which delivers full-spectrum risk adjustment oversight:

  • AI-Powered Chart Selection
    Select the best-supported charts for CMS submission using NLP-based scoring models.

  • HCC Compliance Dashboards
    Real-time visibility into coding quality, encounter completeness, and audit risk.

  • Pre- and Post-Submission Analytics
    Track HCC integrity from initial coding to MAO-004/MOR confirmation.

  • CMS Document Search
    Query regulatory PDFs (like the ones in this blog!) using natural language search.

Don’t Wait for the CMS Audit Letter

RADV is no longer a distant threat—it’s an urgent priority. The 2026 deadline leaves little time for trial-and-error. By combining regulatory insight with AI automation, Health Data Max helps MAOs:

  • Minimize extrapolated error risk

  • Defend every dollar of risk adjustment revenue

  • Future-proof audit processes before CMS arrives

Contact Us to schedule a demo or request a pilot evaluation today.

CMS Finalizes June 16, 2025 Deadline for PY2020 RADV Closed Period Deletes

No Extensions Will Be Granted

On May 30, 2025, the Centers for Medicare & Medicaid Services (CMS) released an official HPMS memo titled “Deadlines for the Submission of Risk Adjustment Data for Risk Adjustment Data Validation Sampling.” The memo outlines a critical compliance deadline for all Medicare Advantage Organizations (MAOs):

All closed period deletes for Payment Year (PY) 2020 must be submitted no later than June 16, 2025.
No extensions will be granted.

This is a firm, non-negotiable deadline. MAOs must ensure timely review and submission to maintain compliance and minimize RADV-related financial risk.

What Are Closed Period Deletes?

Closed period deletes refer to the removal of diagnosis codes submitted for payment in prior years that are no longer eligible for standard correction. These deletes are allowed specifically to prepare for Risk Adjustment Data Validation (RADV) audits, which assess the accuracy of risk-adjusted payments.

CMS permits these deletions prior to the RADV audit sample selection, offering health plans a final opportunity to align submitted data with the supporting clinical documentation.

Key Takeaways from the Memo

  • Deadline: All deletes for PY2020 must be submitted by June 16, 2025.

  • Applies to: Submissions via both RAPS and EDPS.

  • No exceptions or extensions will be provided after the deadline.

  • Deletions submitted after this date will not be excluded from RADV sample consideration.

Implications for MA Plans

This deadline is especially significant in light of CMS’s broader initiative to accelerate the RADV audit timeline. CMS has announced its intention to complete all remaining RADV audits for PY2018 through PY2024 by early 2026 — compressing seven years of audit activity into a short timeframe.

MAOs should take the following immediate steps:

  • Conduct a thorough internal review of all PY2020 diagnosis submissions.

  • Identify and submit unsupported or invalid diagnoses for deletion.

  • Ensure that retained codes are fully supported by appropriate medical record documentation.

  • Confirm that deletes are submitted through the appropriate RAPS or EDPS pathways by the deadline.

Compliance Risk and Financial Impact

Failure to remove unsupported diagnoses before sampling could significantly increase audit exposure and result in repayment obligations. Given the lack of extensions, plans that miss this window may have no recourse to mitigate findings for PY2020 RADV.

Conclusion

The June 16, 2025 deadline represents a critical milestone in CMS’s evolving approach to RADV enforcement. Health plans should act with urgency to complete their data reviews and deletions.

Proactive data validation today is the key to audit readiness tomorrow.

For support with closed period deletes, RADV audit preparation, or risk adjustment data integrity, contact the team at Health Data Max. Our experts assist MAOs in achieving full compliance and minimizing risk exposure.

OIG Audit Finds $6.9M in Overpayments: A Wake-Up Call for Medicare Advantage Plans

The Background: Why OIG Audited Coventry 

Under the Medicare Advantage program, CMS makes risk-adjusted payments based on enrollees’ documented health conditions. These diagnoses, submitted by MA organizations, must be backed by medical record documentation

But some conditions — especially those with high payment weights — are more susceptible to miscoding or lack of clinical support

That’s why the Office of Inspector General (OIG) targeted 10 high-risk diagnosis groups submitted by Coventry Health and Life Insurance Company (Contract H1608) for payment years 2018 and 2019

What OIG Found: Unsupported HCCs and Big Overpayments 

In a sample of 300 enrollee-years, OIG found that 249 had unsupported diagnosis codes — a staggering 83% error rate

As a result, the audit uncovered: 

  • $752,587 in net overpayments within the sample 

  • An extrapolated estimate of $6.9 million in net overpayments to Coventry for just 2018 and 2019 

OIG concluded that Coventry’s internal policies and procedures to prevent, detect, and correct HCC coding errors were inadequate, leaving CMS exposed to significant financial loss. 

What the OIG Recommends 

The report didn’t pull any punches. The OIG made three clear recommendations to Coventry: 

  1. Refund the estimated $6.9 million in overpayments to the Federal Government 

  2. Identify and refund overpayments for similar diagnosis submissions outside of the audit period 

  3. Improve compliance processes to better align with CMS’s risk adjustment requirements 

Coventry disagreed with some of the audit’s findings and rejected all three recommendations, but the report stands as a strong signal from OIG and CMS about enforcement expectations. 

What This Means for the Industry 

This isn’t just about one health plan — this is a compliance spotlight moment for the entire Medicare Advantage space. 

The key takeaway is simple but critical: 

If your diagnosis code isn't backed by valid, timely medical documentation — it shouldn't be submitted. 

This includes: 

  • Clinical notes showing condition monitoring, treatment, or evaluation 

  • Labs, imaging, prescriptions, or referrals supporting the diagnosis 

  • Evidence that the condition was present and addressed during the payment year 

Anything less invites audit risk, clawbacks, and reputational damage

Lessons for MA Plans, Coders & Providers 

To avoid ending up in a future audit headline, Medicare Advantage organizations should: 

  • Conduct internal retrospective audits of high-risk HCCs 

  • Validate diagnosis codes before submission, not after 

  • Train coders and providers on active condition management documentation 

  • Align internal workflows with CMS and OIG expectations for clinical support 

Coding accuracy isn’t just about revenue — it’s about defensibility

Final Thoughts: This Audit Isn’t the Last — It’s the Start 

As CMS and the OIG expand their focus on risk adjustment compliance, every MA plan should consider this report a warning — and an opportunity. 

Plans that prioritize clinical validation, invest in documentation improvement, and build audit-ready workflows will not only avoid clawbacks — they’ll lead the way in transparency and patient-centered care. 

Need support reviewing your HCCs before CMS or OIG does? 
Let Health Data Max help you build AI-powered audit defenses and documentation validation workflows. 

Contact Us for comprehensive Risk Adjustment platform including audit support. 

CMS Delays Shutdown of CSSC Operations Website: What You Need to Know

CMS recently announced that it will postpone the planned decommissioning of the CSSC Operations website, which was originally scheduled to occur on May 31, 2025. This site, csscoperations.com, plays an important role in Medicare Advantage and Part D operations, especially when it comes to Risk Adjustment and Prescription Drug Event (PDE) data submission

The decision to delay comes as CMS works to ramp up its Risk Adjustment Data Validation (RADV) audits. The agency recognizes that the CSSC website provides essential tools and information that many health plans and system vendors rely on for timely and accurate data submission. Disrupting access during such a critical compliance period could negatively impact reporting, so CMS is hitting pause — for now. 

So what does this mean for you? It means nothing changes just yet. Health plans can continue to access everything they need through csscoperations.com, including file layouts, submission guidance, and technical documentation. The site remains the central hub for encounter data and PDE submissions until further notice. 

CMS hasn’t shared a new date for the transition to CMS.gov, but they’ve confirmed that more information will be provided in a future memo. Until then, you can keep using the same processes and tools you’re already familiar with. 

Support also remains in place. The CSSC Operations Help Desk is still available to answer your questions related to data submissions. You can reach them at csscoperations@palmettogba.com or by phone at 1-877-534-2772

This extension is good news — it gives you more time to stabilize your internal systems, ensure submission accuracy, and prepare for whatever the next phase of migration looks like. But it’s also a reminder: while the shutdown is postponed, it’s not canceled. Use this time wisely to stay audit-ready and ahead of future changes. 

Need help preparing your risk adjustment data workflows for future transitions? Contact us at sales@healthdatamax.com or visit healthdatamax.com to get started. 

CMS Announces Deadlines for Medicare Advantage Risk Adjustment Data Corrections Ahead of RADV Audits

May 30, 2025 — Baltimore, MD 

The Centers for Medicare & Medicaid Services (CMS) has issued a notice to all Medicare Advantage (MA) organizations regarding upcoming Risk Adjustment Data Validation (RADV) audits. CMS is now accelerating audit activities for Payment Years (PYs) 2018 through 2024, and MA plans must act quickly to meet the deadlines for submitting risk adjustment data corrections (closed period deletes). 

What’s Happening? 

  • CMS is initiating RADV sampling for PYs 2020 through 2024 starting June 2025

  • MA plans must submit any known data deletes in RAPS and/or EDPS before the specified deadlines. 

  • Once a deadline passes, CMS instructs plans to pause all data corrections and overpayment reports for that PY until further notice. 

Submission Deadlines (Point by Point) 

  • For PY 2020: 

    • System: RAPS and EDPS 

    • Dates of Service: January 1, 2019 – December 31, 2019 

    • Deadline: June 16, 2025 

  • For PY 2021: 

    • System: RAPS and EDPS 

    • Dates of Service: January 1, 2020 – December 31, 2020 

    • Deadline: June 23, 2025 

  • For PY 2022: 

    • System: EDPS only 

    • Dates of Service: January 1, 2021 – December 31, 2021 

    • Deadline: June 30, 2025 

  • For PY 2023: 

    • System: EDPS only 

    • Dates of Service: January 1, 2022 – December 31, 2022 

    • Deadline: July 8, 2025 

  • For PY 2024: 

    • System: EDPS only 

    • Dates of Service: January 1, 2023 – December 31, 2023 

    • Deadline: July 15, 2025 

What MA Plans Need to Know 

  • Do not submit overpayment reports or auditable estimates to the RAOR module for PYs 2020–2024 after the deadlines listed above. 

  • Do continue to comply with Section 1128J(d) of the Social Security Act and 42 CFR 422.326, even while submissions are paused. 

  • CMS will notify MA organizations via HPMS when it’s time to resume submissions and reporting. 

  • Once that notice is given, plans must report and return overpayments for members not included in the RADV sample for the given PY. 

Additional Guidance 

MA organizations should review the following HPMS memos for details about handling encounter data deletes: 

  • March 15, 2024 – Support for Use of Encounter Data in Overpayment Reruns 

  • May 21, 2024 – Follow-Up to May 1, 2024 “Use of Encounter Data” User Group 

Note: CMS will not make payment adjustments at this time based solely on the closed period deletes. Future HPMS memos will provide updates on overpayment reruns for these years. 

Questions? 

Reach out to us at sales@healthdatamax.com for comprehensive Risk Adjustment platform including audit support.

Stay proactive, stay compliant, and prepare your submissions early to meet CMS's evolving oversight standards. 

CMS Tightens the Screws on Medicare Advantage: Why AI is the Key to Audit Survival

What’s New: CMS Is Getting Aggressive with MA Audits

In a significant announcement, the Centers for Medicare & Medicaid Services (CMS) outlined a comprehensive, fast-tracked audit strategy to improve oversight of Medicare Advantage (MA) payments.

Their top priority? Clearing the backlog.

CMS plans to complete all remaining RADV (Risk Adjustment Data Validation) audits from Payment Year (PY) 2018 through PY2024 by early 2026. For context — the last major RADV-based overpayment recovery was from PY2007. That means CMS is nearly two decades behind... and they’re now hitting the gas.

Here’s what this means in practice:

  • 7 full years of audits (PY2018–2024) will be completed in less than two years

  • CMS is closing the gap on overdue recoveries

  • Expect clawbacks to ramp up as audits are finalized at scale

This is not just another oversight update — it’s an accelerated clean-up effort that will impact every Medicare Advantage plan operating in the last seven years.

Why This Should Raise Red Flags for Health Plans

This strategy isn't hypothetical. CMS has already begun using advanced analytics and broader review tactics to identify potential overpayments tied to inaccurate or unsupported diagnoses.

If your plan has legacy data, unvalidated codes, or documentation gaps between 2018 and 2024, you may already be under the audit spotlight.

Here’s what you’re up against:

  • Years of submissions under scrutiny at once

  • Increased risk of retroactive payment recovery

  • Higher administrative burden to compile and defend older records

Manual chart reviews, disconnected systems, and inconsistent coding standards simply won’t hold up during a retrospective audit that spans multiple payment years.

The Bigger Question: Can You Defend 7 Years of Risk Scores?

As we emphasized in this LinkedIn post, the question isn’t just whether your current workflows are working it’s whether your past submissions are defensible.

Ask yourself:

  • Do you have documentation to support diagnoses submitted in 2018 - 2024?

  • Can you trace coding decisions across older provider networks?

  • Are your historical encounter, chart, and claims data properly aligned?

If the answer is anything less than a confident yes, AI-powered tools can make all the difference.

Where AI Makes the Difference: Risk Adjustment, Reinvented

At Health Data Max, we’ve developed a modern, AI-driven risk adjustment platform designed to help MA plans gain full control — past, present, and future — of their data integrity.

AI-Powered Chart Validation

  • Detects unsupported or vague diagnoses

  • Prioritizes audit-defensible records for every payment year

  • Flags risks across multi-year submissions

Unified Data Management Across Payment Years

  • Ingests EDI 837s, claims, charts, eligibility, and provider attribution

  • Centralizes your PY2018–PY2024 data in one platform

Retrospective + Prospective Audit Readiness

  • Runs historical data through validation models

  • Identifies gaps and supports audit responses for every year in scope

Audit Simulation Tools

  • Stress-tests your risk score submissions

  • Prepares your team for CMS inquiries across multiple audit cycles

Why This Matters More Than Ever

Let’s be blunt: CMS is under pressure to recover funds — and your plan’s historical submissions are now fair game.

Whether it’s PY2018 or PY2024, your team must be ready to defend documentation and prove accuracy. Health plans that can’t trace a diagnosis back to solid clinical evidence risk:

  • Losing revenue

  • Facing clawbacks

  • Getting flagged for deeper compliance reviews

With the right AI tools, you can:

  • Validate data across all payment years

  • Surface the most reliable and compliant records

  • Build a strong audit defense — before CMS asks for it

Your 5-Step Audit Survival Plan for PY2018–PY2024

  1. Aggregate All RA Data from PY2018–2024
    Ensure you can access encounter, claims, chart, and attribution data for every year.

  2. Run Retrospective AI Validation
    Scan older submissions for unsupported HCCs or diagnosis codes.

  3. Centralize Documentation
    Make sure all supporting clinical evidence is retrievable and mapped to encounters.

  4. Create an Internal RADV Response Playbook
    Prepare audit response packs by year, by condition, and by provider.

  5. Use Audit Simulation to Stay Ahead
    Don’t wait for a notice. Run simulated audits to find and fix gaps in advance.

Final Thoughts: This Isn’t a Drill — It’s a Deadline

CMS is moving aggressively to clean up seven years of RADV audits in less than two. This isn’t a compliance suggestion — it’s an operational emergency for MA plans.

If you’re not fully integrated, validated, and audit-ready across PY2018 to PY2024, now is the time to act.

Because by early 2026, CMS will have already made up for lost time — and if your plan is out of sync, it could come at a serious financial and reputational cost.

Want to See How AI Can Audit-Proof Your Past Submissions?

Contact us at sales@healthdatamax.com
🔗 Schedule a free demo or pilot today

Let’s help you build a risk adjustment infrastructure that defends your revenue — across every payment year.

Helpful Resources

Understanding the Q1 2025 Encounter Data Report Cards for Medicare Advantage Plans

What Are Encounter Data Report Cards?

Since 2019, CMS has provided Encounter Data Report Cards to Medicare Advantage Organizations (MAOs) to help monitor their data submission activity. These quarterly reports highlight patterns where an MAO’s encounter data volume appears significantly lower than expected—potentially signaling incomplete reporting or system-level issues.

The objective? To offer constructive feedback and technical guidance, helping plans ensure the completeness and accuracy of their encounter data used in risk adjustment calculations.

What’s New: Q1 2025 Report Card Update

CMS has released the latest update for Q1 2025. Plans can now access their updated report cards, which may include:

  • Comparative metrics across similar-sized MAOs

  • Historical submission trends

  • Submission completeness by provider type or encounter category

  • Identified low-volume patterns relative to benchmarks

  • Flags for CMS technical assistance or outreach

These reports serve as a diagnostic tool—not a penalty mechanism—but could still have downstream implications for revenue, compliance, and audits.

Why Do These Report Cards Matter?

Encounter data is foundational to the Medicare Advantage risk adjustment model, which in turn drives payment accuracy and program integrity. If your organization’s encounter data submissions are low or inconsistent, this can lead to:

  • Underreported risk scores

  • Revenue loss due to missed diagnoses

  • Increased audit scrutiny

  • Missed quality improvement opportunities

CMS uses these report cards to guide technical assistance efforts, so staying ahead of your metrics is essential.

How to Access the Q1 2025 Report Cards

CMS has made the Q1 2025 Encounter Data Report Cards available through the Health Plan Management System (HPMS). Here’s how to access them:

Path:
HPMS Home Page > Risk Adjustment > Encounter Data > Encounter Data Report > 2025 May Update

Only authorized HPMS users will be able to retrieve the report. If you need access, contact your internal HPMS administrator.

Questions or Issues?

If you have questions about your Encounter Data Report Card or believe your data may not be accurately reflected, CMS encourages MAOs to reach out directly.

Contact:
Send an email to RiskAdjustmentOperations@cms.hhs.gov
📝 Subject Line: “Report Card Q1 2025 Update”

Recommendations for MAOs

To ensure your encounter data reporting stays in line with CMS expectations, consider these best practices:

  • Review the report card thoroughly and cross-reference flagged areas with internal systems.

  • Engage IT, compliance, and data teams to investigate low-volume metrics.

  • Validate data flows from providers and clearinghouses to ensure timely and complete submissions.

  • Respond to CMS feedback proactively if outreach is initiated.

  • Document all efforts to monitor, correct, and maintain encounter data compliance.

Frequently Asked Questions (FAQs)

Q: Are Encounter Data Report Cards mandatory for MAOs to act on?
A: While not punitive, the reports are a strong signal that CMS has detected low or inconsistent data, which may warrant technical assistance or correction.

Q: What should I do if my report card shows low submission rates?
A: Investigate the causes internally—look at EHR data flows, submission timing, and provider data completeness—and consider reaching out to CMS if clarification is needed.

Q: Can these reports impact RADV audits?
A: Indirectly, yes. Persistent low data volumes can raise red flags and affect CMS's confidence in the plan’s risk adjustment data integrity.

Q: How often are these report cards issued?
A: Quarterly, typically within a few months after each calendar quarter ends.

Final Thoughts

CMS's Encounter Data Report Cards aren’t just another administrative burden—they’re a valuable tool for improving data quality, compliance, and ultimately, plan performance. The Q1 2025 update is now available, and MAOs should use this opportunity to assess and enhance their submission practices.

By staying informed and proactive, your organization can ensure alignment with CMS expectations while safeguarding revenue and compliance integrity.

Understanding the Medicare Advantage RADV Appeals Process: A Guide for MAOs

What Is the RADV Appeals Process?

The Risk Adjustment Data Validation (RADV) audit process is part of CMS's oversight responsibilities to ensure the accuracy of risk adjustment data submitted by Medicare Advantage Organizations (MAOs). If CMS determines overpayments were made based on invalid diagnoses, MAOs may face financial recoupments. However, CMS provides an appeals pathway to challenge certain findings through a structured process involving the CMS Hearing Officer.

This process is critical for any MAO seeking to dispute RADV audit results and protect its financial integrity.

Who Oversees the Appeals?

Appeals related to RADV audit findings are reviewed by a CMS Hearing Officer. This individual acts independently and is not part of the RADV audit team or the Office of the Actuary.

The CMS Hearing Officer evaluates whether CMS properly applied its rules and procedures when determining a payment error based on medical record review.

What Can Be Appealed?

Medicare Advantage Organizations may request reconsideration for RADV audit findings that lead to payment adjustments. This typically applies to:

  • Final RADV audit findings where payment errors were determined.

  • Disagreements with CMS's use or interpretation of documentation or policies that resulted in overpayment determinations.

Important: The appeals process does not cover general policy disagreements or procedural complaints that do not directly affect the audit outcome.

Key Steps in the RADV Appeals Process

Let’s walk through the major steps involved when a Medicare Advantage Organization initiates an appeal:

1. Request for Reconsideration

MAOs must submit a written request for reconsideration within the timeframe specified in CMS’s final RADV audit findings notice.

  • Format: The request must clearly state the basis for the appeal and reference supporting evidence.

  • Deadline: The timeframe is typically short, so MAOs must act promptly.

2. Review by CMS Hearing Officer

Once the request is received, the CMS Hearing Officer will conduct an independent and objective review of the materials. This includes:

  • Audit findings

  • Medical records

  • Appeals submission and rationale

The hearing officer will then issue a reconsideration decision, which either upholds or overturns the original CMS audit decision.

What Happens After the Hearing Officer Decision?

The decision issued by the CMS Hearing Officer is considered final at the administrative level. There is no second-level administrative appeal for RADV audit determinations. However, MAOs may pursue further review through judicial proceedings if desired.

Required Documentation

To support a strong appeal, MAOs should prepare and submit:

  • A detailed explanation of each disputed finding

  • The specific supporting documentation or corrected records

  • Any evidence demonstrating CMS misapplied policy or used incorrect methodology

  • References to CMS guidelines or prior decisions (when applicable)

Where to Access Official Resources

CMS provides detailed information about the RADV appeals process on its official site. Visit:

👉 CMS RADV Appeals Process Page

Here, you’ll find:

  • Description of the hearing officer's responsibilities

  • Reconsideration request guidelines

  • Contact details for submitting appeals

Tips for a Successful Appeal

If your organization is preparing to challenge a RADV audit result, here are a few best practices to consider:

  • Act quickly – Don't miss the submission deadline.

  • Be thorough – Include detailed reasoning and evidence for every contested item.

  • Stay organized – Structure your request in a clear, professional format.

  • Use CMS references – Support your case with CMS manuals, memos, or prior rulings.

  • Consult legal or compliance experts – Especially for high-stakes findings or complex issues.

Frequently Asked Questions (FAQs)

Q: Can I appeal every RADV audit finding?
A: Only those findings that result in a payment adjustment and are tied to medical record discrepancies may be appealed.

Q: Is the CMS Hearing Officer independent?
A: Yes, the hearing officer operates independently from the RADV audit and CMS program teams.

Q: Is there a deadline to submit the appeal?
A: Yes, the deadline is defined in CMS’s audit result notice. Delayed submissions are generally not accepted.

Q: Can the hearing officer's decision be appealed?
A: No administrative appeals follow the hearing officer’s decision. However, MAOs may pursue judicial review.

Q: Can I get help drafting an appeal?
A: Yes, most MAOs engage compliance teams, legal counsel, or third-party RADV specialists.

Final Thoughts

The RADV appeals process is an essential safeguard for Medicare Advantage Organizations facing potential financial impacts from CMS audit determinations. By understanding the role of the CMS Hearing Officer and adhering to the structured procedures, MAOs can ensure fair consideration of disputed findings and uphold compliance with risk adjustment guidelines.

If your organization receives a RADV audit result that raises concerns, don’t delay—begin reviewing the findings, collecting documentation, and preparing your appeal with precision.

CMS Reinstates 2012 CPT/HCPCS List for 2015 Risk Adjustment Reconciliation Rerun: What It Means for MAOs

The Centers for Medicare & Medicaid Services (CMS) has implemented a key update as part of the May 2025 payment cycle: a Risk Adjustment Reconciliation Rerun for Payment Year (PY) 2015. This change involves the reinstatement of the 2012 CPT/HCPCS exclusion list used to filter Fee-For-Service (FFS) diagnoses, with implications for Medicare Advantage Organizations (MAOs) across the board. 

Let’s walk through what this means, why it matters, and how to ensure your organization stays aligned with this update. 

What Is the 2015 Risk Adjustment Reconciliation Rerun? 

The May 2025 CMS payment adjustments include a rerun of the PY 2015 risk adjustment reconciliation. While 2014 is the service year tied to PY 2015 payments, CMS has chosen to reinstate the 2012 CPT/HCPCS list—not the 2014 list—as the filtering mechanism for identifying which FFS diagnoses are excluded from risk score calculations. 

Why 2012 Instead of 2014? 

This decision stems from the fact that the reopening of the 2015 Part D payment reconciliation was based on systems and methodologies in place at that time, which included the 2012 list. CMS is maintaining consistency by reverting to that list for this specific rerun. 

What Is the CPT/HCPCS Exclusion List? 

The Outpatient CPT/HCPCS Excluded Services List is used to filter out certain diagnosis codes based on whether they were supported by CPT/HCPCS procedure codes during the service year. This ensures only valid, supported diagnoses are considered in risk score calculations. 

For the 2015 rerun, CMS applied the 2012 version of this list—even though the reconciliation impacts 2014 service year data—because that was the list applicable when the original reconciliation was re-opened. 

Where Can You Find the Updated List? 

CMS has made the applicable exclusion list available on the CSSC Operations website, listed as: 

Outpatient CPT HCPCS Excluded Services List for PYs 2013–2017 

Stakeholders should refer to this specific document to determine which codes were filtered in the updated reconciliation rerun. 

Referenced CMS Communication 

For additional clarification, MAOs and Part D sponsors are encouraged to consult the Medicare Advantage/Prescription Drug System (MARx) August 2024 Payment Memo, originally published on July 31, 2024. This memo provides context on: 

  • Years affected by the CPT/HCPCS list reinstatement 

  • Rationale behind the use of the 2012 list 

  • Additional instructions for impacted organizations 

Why This Matters to MAOs 

This update may affect final reconciled risk scores for PY 2015 and could result in revenue adjustments for certain Medicare Advantage plans. 

Key Implications: 

  • Revenue Impact – Payments for PY 2015 may change depending on how diagnoses were previously filtered. 

  • Audit Preparedness – Historical encounter and FFS data may need to be re-evaluated for compliance and accuracy. 

  • Operational Review – Compliance teams should ensure that their documentation aligns with the CPT/HCPCS list applied during this rerun. 

What Should You Do Next? 

To stay aligned with CMS guidance and prepare for any downstream impacts: 

Action Steps for MAOs: 

  1. Download and Review the 2012 CPT/HCPCS Exclusion List 
    Available on the CSSC Operations site under the PYs 2013–2017 exclusion list. 

  2. Assess Internal Reconciliation Data 
    Ensure that your diagnosis data from PY 2015 aligns with the criteria from the reinstated list. 

  3. Update Risk Score Projections 
    Adjust any internal models or forecasts that rely on previously calculated risk scores from PY 2015. 

  4. Communicate with Finance and Compliance Teams 
    Inform relevant departments about the potential financial and reporting impacts. 

  5. Monitor CMS Announcements 
    Continue to track updates from CMS or HPMS that may impact historical payments or methodologies. 

Frequently Asked Questions (FAQs) 

Q: Why is CMS using the 2012 CPT/HCPCS list instead of the 2014 list for PY 2015? 
A: Because the reopening of the 2015 reconciliation used systems from that period, CMS reinstated the 2012 list to maintain consistency. 

Q: Where can I find the applicable CPT/HCPCS exclusion list? 
A: The list is posted on the CSSC Operations website under “Outpatient CPT HCPCS Excluded Services List for PYs 2013–2017.” 

Q: Will this impact current or future payments? 
A: Yes, this rerun has already been applied to the May 2025 payment and could result in revenue changes for affected plans. 

Q: Does this apply to all Medicare Advantage Organizations? 
A: It applies to any MAO that submitted encounter data relevant to PY 2015 and may have had risk scores affected by the change. 

Final Thoughts 

The reinstatement of the 2012 CPT/HCPCS exclusion list for the 2015 risk adjustment reconciliation underscores the importance of staying vigilant about CMS retroactive changes. Medicare Advantage Organizations should act swiftly to assess how this update affects historical data, payments, and compliance metrics. 

If you’re unsure how your plan is impacted, now is the time to coordinate with compliance, finance, and risk adjustment teams to ensure a full understanding of the update. 

Why V28 HCC Coding Demands Sharper Clinical Precision: Key Changes and Tips 

V28 HCC coding updates eliminate over 2,200 risk-adjusting diagnoses, requiring more detailed documentation and clinical precision. Learn essential strategies and tips today! 

Excerpt Introduction: 
The jump from V24 to V28 in HCC coding has major consequences: over 2,200 diagnoses that used to map to payment HCCs are now off the table. Coders and clinicians alike must now bring their A-game when it comes to documentation precision. Let’s dig into what’s changed, why it matters, and how you can adapt with smart strategies! 

Introduction: A New Era of Clinical Specificity 

If you thought HCC coding was tricky before, buckle up — with V28, it just got even more nuanced! CMS’s latest model strips away more than 2,200 ICD-10 codes that once mapped to payment HCCs under the V24 model. This means general diagnoses like hyperlipidemia (E78.5) or unspecified diabetic complications no longer automatically help with risk adjustment. 

Now, coders must prove specificity. It’s no longer enough to say someone has "diabetes with other complications." You need to nail down exactly what complication — backed by solid clinical evidence. 

What’s Changed from V24 to V28? 

In simple terms: less guesswork, more precision. 

Here’s a real-world coding comparison to make it crystal clear: 

  • V24: 
    E11.69 — Diabetes mellitus with other complication → Mapped to an HCC 

  • V28: 
    E11.69 — Nope, no longer cuts it. 
    Instead, you need to document specifically, like: 

    E11.22 — Type 2 diabetes with chronic kidney disease 

    E11.319 — Type 2 diabetes with unspecified diabetic retinopathy 

👉 Bottom line: The burden is now on clinicians to document and coders to code specific, clinically validated conditions

Why Does This Matter? 

Well, a couple of big reasons: 

  • Risk Adjustment Payments: Fewer mapped diagnoses mean lower risk scores if specificity isn’t captured. 

  • Clinical Accuracy: It pushes healthcare providers toward more accurate patient records, which (bonus!) also improves patient care. 

  • Audit Readiness: Less ambiguity = stronger protection in case of audits. 

In short, without precise documentation, organizations could lose out on appropriate reimbursements and open themselves up to compliance risks. Not exactly the party you wanna be at, right? 

Clinical Coding Tip: Be Specific, or Be Sorry 

How do you thrive under V28? Here’s your cheat sheet: 

  • Use Lab Data: 
    Confirm complications like CKD with lab results (e.g., eGFR levels). 

  • Leverage Imaging Reports: 
    Radiology can validate conditions like diabetic retinopathy or chronic heart failure. 

  • Pull in Consults: 
    Specialist notes are golden for justifying nuanced diagnoses like nephropathy or neuropathy. 

  • Avoid “Unspecified” Diagnoses: 
    Whenever possible, go hunting for the specifics in the EHR (Electronic Health Record). 

  • Educate Providers: 
    Quick provider education sessions can make a massive difference in documentation quality. 

A Quick Example to Bring It Home: 

Suppose a patient has diabetes and their labs show early-stage CKD (Chronic Kidney Disease). 
Instead of coding a general diabetes complication, here’s what to do: 

  • Wrong way (V24 mindset): 
    Code E11.69 — Diabetes with other complication. 

  • Right way (V28 precision): 
    Code E11.22 — Diabetes with chronic kidney disease. 

Simple enough when you know what to look for, right? 

FAQs 

Q: Which diagnoses are most impacted by the V28 changes? 
A: Common general codes like hyperlipidemia (E78.5) and unspecified diabetic complications are among the major ones. Always double-check for specificity now. 

Q: How can coders adapt quickly to V28? 
A: Invest time in cross-training with clinical staff, use clinical data smartly, and set up internal audits to catch gaps early. 

Q: Will these changes impact risk scores significantly? 
A: You bet! Less specificity = lower scores. Higher specificity = accurate, defendable scores. 

Wrapping It Up: Precision is Your Power Move 

The shift from V24 to V28 isn’t just another coding update — it’s a complete mindset change. With over 2,200 fewer risk-adjusting codes, your documentation game must be razor-sharp. 

Action Steps: 

  • Get cozy with lab, imaging, and consult data. 

  • Train providers to document clearly and specifically. 

  • Audit early and often to catch mistakes before they cost you. 

Remember, precision isn’t just about payment — it’s about better care, stronger compliance, and smarter coding. You've got this! 

Helpful External Resources: 

CMS Releases Beneficiary-Level Risk Score Files to Support 2026 Part C Bids & ESRD Forecasting

As Medicare Advantage (MA) organizations prepare their bids for Calendar Year (CY) 2026, the Centers for Medicare & Medicaid Services (CMS) has issued comprehensive beneficiary-level files designed to support risk score analysis and bid accuracy. These files represent a critical step in aligning actuarial projections with upcoming policy changes under the finalized payment model. 

This web-ready blog offers a clear breakdown of what’s included, how health plans should use the data, and what it means for strategic forecasting in 2026. 

What's in the CMS Risk Score Files? 

CMS released two distinct files to Medicare Advantage and 1876 Cost Plans: 

  1. Part C Risk Score File 

  1. ESRD Risk Score File 

These files include: 

  • Contract-level, beneficiary-specific risk scores 

  • Medicaid status stratification (Non-dual, Partial Dual, Full Dual) 

  • Monthly segmentation by enrollment type (Institutional, Community, New Enrollee, C-SNP) 

  • Risk scores calculated using both CMS-HCC V24 and V28 for Part C 

  • Risk scores calculated using the 2023 ESRD model for ESRD enrollees 

Risk Adjustment Models Used 

  • Part C Scores: Based on 2023 data, using both 2020 CMS-HCC V24 and 2024 CMS-HCC V28 models. V28 will be used for 2026 payments. 

  • ESRD Scores: Based on the 2023 CMS ESRD model, which continues to apply for 2026. 

CMS provides raw scores; plans must apply normalization factors before using them for financial modeling. 

2026 Normalization Factors to Apply 

Model Type  Factor 

Part C (V28)  1.067 

ESRD Dialysis  1.062 

ESRD Functioning Graft  1.104 

Normalization ensures risk-adjusted payments are correctly scaled to reflect expected population-level costs. 

ESRD File Details 

  • Dialysis: LTI, non-LTI, dual status 

  • Post-Graft: 4–9 months and 10+ months post-transplant 

  • New Enrollee ESRD scores 

  • Additional indicators: transplant status, hospice enrollment, and dialysis months 

File Delivery and Access 

Files were delivered through CMS secure systems: 

  • GENTRAN or Connect:Direct 

Naming Conventions

  • Part C: P.Rxxxxx.PTC2026.Dyymmdd.Thhmmsst.pn 

  • ESRD: P.Rxxxxx.ESR2026.Dyymmdd.Thhmmsst.pn 

Strategic Recommendations for MA Plans 

  • Compare RAFs under V24 and V28 to evaluate revenue impact 

  • Stratify scores by Medicaid category for premium adjustments 

  • Integrate transplant, hospice, and dialysis indicators into bid capitation modeling 

  • Apply correct normalization before forecasting 

  • Educate actuarial and risk teams on CMS logic and assumptions 

Contact CMS for Support 

Final Thoughts 

These CMS files are essential for 2026 bid accuracy. They reflect evolving model logic, policy priorities, and the increased complexity of beneficiary stratification in Medicare Advantage. Proactively analyzing this data will help plans optimize bids, comply with CMS expectations, and maintain financial performance in the upcoming cycle. 

CMS Finalizes 2026 Payment Policy Updates for Medicare Advantage and Part D: What Health Plans Need to Know 

Overview The Centers for Medicare & Medicaid Services (CMS) has officially released the final Calendar Year (CY) 2026 Rate Announcement for Medicare Advantage (MA) and Medicare Part D. Alongside the final rule issued on April 4, these updates shape the financial and operational landscape for all MA and Part D stakeholders going into 2026. 

These changes include finalized payment policies, risk adjustment model enhancements, updates to the effective growth rate, and the final implementation of Part D redesign components — all with the goal of ensuring affordability, sustainability, and integrity within the Medicare Advantage program. 

Key Highlights of the CY 2026 Rate Announcement 

📈 Average MA Plan Payments to Increase by 5.06% 

CMS projects a 5.06% average increase in government payments to Medicare Advantage plans from 2025 to 2026 — up from the originally forecasted 2.23% in the Advance Notice. This increase is largely attributed to a higher effective growth rate, now finalized at 9.04% (vs. 5.93% previously). 

What Changed? Additional Q4 2024 fee-for-service (FFS) expenditure data was included in the updated calculation, resulting in the upward revision. 

✅ Completion of Medical Education Adjustment Phase-In 

CY 2026 marks the final year of a three-year phase-in of adjustments related to medical education costs. Starting this year, 100% of MA-related education expenses will be excluded from the growth rate calculations — a technical change, but one that ensures a more accurate accounting of Medicare costs. 

📊 Final Year of Risk Adjustment Model Phase-In 

CMS continues its strategic updates to the MA risk adjustment model, originally announced in CY 2024. CY 2026 is the third and final year of the model transition, which includes updated HCC groupings and refinements that more closely align with clinical severity and cost prediction. 

Why it matters: These updates help CMS better predict true patient complexity while curbing coding inflation. 

Part D Redesign: Guidance for 2026 CMS also released the Final CY 2026 Part D Redesign Program Instructions, which further roll out changes initiated by the Inflation Reduction Act. Highlights include: 

  • Updated benefit structure 

  • Detailed implementation guidance for plans 

  • New policies designed to increase beneficiary access to affordable medications 

These redesigns underscore CMS's continued shift toward a value-based pharmacy benefit, with stronger focus on affordability and cost-sharing limits. 

Implications for Health Plans & Providers 

  • Financial Forecasting: Plans should update budget forecasts using the finalized 5.06% payment increase and risk adjustment changes. 

  • Documentation & Coding: Final year of the risk model transition means coding teams must be fully trained on HCC v28 logic. 

  • Pharmacy Strategy: Ensure Part D plan structures are aligned with the redesign rules and member cost-sharing protections. 

  • Compliance Audits: Verify medical education cost exclusions and risk scoring align with CMS guidelines. 

Resources 

Conclusion CY 2026 brings meaningful updates that both strengthen the Medicare Advantage and Part D programs and demand strategic adaptations by payers, providers, and policy leaders. The increase in payments, ongoing model refinements, and redesign of the drug benefit program collectively reinforce CMS’s direction toward equity, quality, and sustainability. 

Health plans that stay ahead of these updates — through data readiness, provider alignment, and coding accuracy — will be best positioned to succeed in 2026 and beyond. 

Released: April 7, 2025 

Source: CMS Newsroom Announcement 

Optimizing Compliance and Financial Accuracy in Medicare Advantage and Manufacturer Discount Programs 

Understanding the Latest Medicare Payment Adjustments and Compliance Guidelines 

The healthcare industry continues to evolve with new compliance requirements and financial reconciliation updates. Medicare Advantage Organizations (MAOs), Prescription Drug Plans (PDPs), and manufacturers participating in discount programs must stay informed about the latest changes in payment processing and dispute resolution. This blog delves into the recent Medicare Advantage Prescription Drug (MARx) system updates and the operational instructions for the Manufacturer Discount Program Disputes, offering best practices to streamline compliance and financial reporting. 

Key Updates in Medicare Advantage/Prescription Drug System (MARx) Payments 

The April 2025 Medicare Advantage/Prescription Drug System (MARx) payment introduces several crucial adjustments: 

  1. 2017 & 2018 Risk Adjustment Overpayment Rerun Cleanup 

    • Adjustments related to risk factor miscalculations for long-term institutional beneficiaries. 

    • Payment Year (PY) 2018 adjustments for closed-period deletes in RAPS and EDPS with services from January 1, 2017, to December 31, 2017. 

    • Organizations should review Monthly Membership Reports (MMRs) under ARC 25 (Part C) and ARC 37 (Part D) for these changes. 

  2. CY2023 Coverage Gap Discount (CGD) Reconciliation 

    • Payment adjustments will be reflected in the Plan Payment Report (PPR) as Special CMS Adjustments (TYPE "PRS"). 

  3. MARx System Migration to Amazon Web Services (AWS) 

    • The transition from mainframe architecture to AWS cloud-based infrastructure has introduced discrepancies in risk score calculations. 

    • CMS is actively addressing these issues and encourages affected plans to report concerns to the MAPD Help Desk. 

  4. Sequestration Suspension and Retroactive Adjustments 

    • Retroactive payment adjustments for May 2020 through March 2022 remain exempt from sequestration. 

    • A phased approach applies sequestration at 1% for April–June 2022 adjustments and 2% for payments from July 2022 onwards. 

Navigating Manufacturer Discount Program Dispute Resolutions 

Manufacturers participating in Medicare’s Discount Program face challenges in dispute resolution, requiring strict adherence to CMS’s operational guidelines. Below are some critical considerations for handling disputes effectively: 

  1. Submission Process 

    • Disputes must be submitted electronically with all required supporting documentation. 

    • Proper categorization and clear evidence increase the likelihood of successful resolutions. 

  2. Timely Responses 

    • CMS imposes strict deadlines for filing and responding to disputes. Late submissions can lead to denials. 

    • Regularly monitoring submission status ensures compliance and reduces the risk of financial loss. 

  3. Common Reasons for Disputes 

    • Incorrect drug classification or pricing discrepancies. 

    • Data mismatches between manufacturer records and CMS reports. 

    • Miscalculations in discount amounts applied to claims. 

  4. Best Practices for Resolution 

    • Establish a standardized internal review process before submitting disputes. 

    • Maintain clear communication with CMS to expedite processing. 

    • Leverage compliance software to automate data validation and reconciliation. 

Optimizing Financial and Compliance Strategies 

To ensure financial accuracy and regulatory compliance, organizations should: 

Regularly Review Payment Adjustments – Monitor MARx reports for discrepancies and validate adjustments promptly. 

Enhance Data Accuracy – Use automated reconciliation tools to detect errors before submitting data to CMS. 

Stay Informed on Policy Changes – Subscribe to CMS updates to remain compliant with evolving payment structures. 

Leverage Technology for Compliance Management – Cloud-based solutions and AI-powered analytics can enhance accuracy in payment reconciliation and dispute handling. 

By integrating these strategies, Medicare Advantage plans, PDPs, and manufacturers can improve financial accuracy, reduce compliance risks, and ensure smoother dispute resolution processes. 

For further details on these updates, refer to the latest CMS memos and documentation available on HPMS and the CMS website.

From Submission to Compliance: How MAOs Can Optimize Encounter Data Reporting

In the dynamic realm of healthcare, effective data management remains a cornerstone for the success of Medicare Advantage (MA) programs. The submission of encounter data reports (EDRs) and claims reports (CRRs) by Medicare Advantage Organizations (MAOs) is pivotal to ensure compliance with the Centers for Medicare & Medicaid Services (CMS) regulations. This guide delves into the intricacies of the Encounter Data Submission and Processing Guide, incorporating recent updates to equip stakeholders with the knowledge and tools necessary for successful data submissions. 

Understanding the MA Companion Guide 

The MA Companion Guide serves as an indispensable resource, supplementing the Technical Report Type 3 (TR3) guides. It offers detailed instructions for electronic communications with CMS and delineates specific requirements for MA plan submissions of EDRs in the X12 837 5010 format. Structured to provide clarity, the guide ensures that MAOs can adeptly navigate the complexities of encounter data submissions.

Recent Updates in Encounter Data Submission 

CMS has recently implemented significant updates to the Encounter Data Processing System (EDPS) to enhance data accuracy and compliance. The December 2024 release introduced new edits and refinements to existing ones: Healthdatamax.com

  • Edit 20160 – Incorrect TOB for Diabetes Screening: This edit ensures that diabetes screening claims align with CMS guidelines by validating submissions based on specific Healthcare Common Procedure Coding System (HCPCS) codes, associated diagnosis codes, and applicable Types of Bill (TOB). Healthdatamax.com

  • Edit 20715 – Expanding AWV HCPCS Code Validation: Updated to incorporate validations for Social Determinants of Health (SDOH) Risk Assessment (HCPCS Code G0136), effective January 1, 2024. This underscores CMS’s focus on holistic health assessment in care delivery. Healthdatamax.com

  • Edit 22020 – Strengthening Validation for Condition and Occurrence Codes: This refinement includes expanded TOB logic to encompass TOB 34X (Home Health) and shifts from service line to header-level validation, streamlining error identification. Healthdatamax.com

Submission of Supplemental Benefit Data 

In February 2024, CMS issued a memorandum detailing the requirements for MAOs to submit supplemental benefit encounter data through the EDPS, beginning with 2024 dates of service. This initiative aims to capture a comprehensive view of services provided to beneficiaries, including those not traditionally considered medical services. MAOs are expected to submit encounter data records (EDRs) for every type of supplemental benefit, addressing previous challenges related to reporting requirements and the absence of standardized procedure codes.

Challenges and Considerations 

The integration of supplemental benefits into encounter data submissions presents several challenges:

  • Lack of Standardization: Many supplemental benefits lack standardized procedure codes, complicating the submission process. MAOs must map these benefits to appropriate codes as specified by CMS.

  • Data Aggregation: Supplemental benefit data often originate from various vendors, necessitating robust strategies for data aggregation, validation, and submission.

  • Quality Assurance: Establishing rigorous quality assurance processes is crucial to ensure the accuracy and completeness of submitted data, particularly given the diverse nature of supplemental benefits.

Essential Resources for MAOs 

To facilitate the submission process, several resources are available to MAOs: 

  • Washington Publishing Company (WPC): Provides technical documents outlining the standards for the 837-I and 837-P formats, essential for compliant encounter data submissions.

  • CMS Edit Spreadsheets: Contain technical edits for the X12 5010 file format, reflecting both general and supplemental instructions specific to Medicare. MAOs must utilize these spreadsheets alongside the MA Companion Guide for comprehensive understanding.

  • User Groups and Technical Assistance: CMS conducts user groups and technical assistance webinars to keep stakeholders informed about key issues, ensuring that MAOs have access to the latest information and support.

Encounter Data Submission Statistics

Monitoring submission statistics provides insight into the performance of encounter data submissions. For instance, in the latter half of 2017, approximately 445 million encounters were received, with an acceptance rate of around 88%. These statistics underscore the significance of compliance and accuracy in submissions, directly impacting the overall performance of MAOs.

Confidentiality Considerations

The submission of encounter data involves sensitive beneficiary information. MAOs must ensure that all data handling complies with confidentiality regulations, safeguarding against unauthorized disclosure and maintaining the integrity of beneficiary information.

Conclusion

The Encounter Data Submission and Processing Guide, along with the MA Companion Guide and supplementary resources, provides a comprehensive framework for Medicare Advantage Organizations to navigate the complexities of encounter data submissions. Recent updates, particularly concerning supplemental benefits, highlight CMS's commitment to capturing a holistic view of beneficiary services. By adhering to the outlined guidelines, staying abreast of updates, and leveraging available resources, MAOs can ensure compliance with CMS requirements and enhance the quality of care provided to beneficiaries.

In the competitive landscape of healthcare, staying informed about these guidelines and continuously improving submission practices is crucial for the success of Medicare Advantage Organizations. By prioritizing data accuracy and compliance, MAOs can contribute to a more effective and efficient healthcare system.

The Evolution of Risk Adjustment Eligible Procedure Codes: What Gets Dropped and Why It Matters

Each year, the Centers for Medicare & Medicaid Services (CMS) updates the list of eligible CPT/HCPCS codes for risk adjustment. Some codes are added, while others are dropped. The latest updates for 2025 have been published and this presents a great opportunity to examine the types of codes that have been removed over the years and their potential implications. 

Understanding the Dropped Codes 

A closer look at historical data shows that approximately 50 codes per year are removed from risk adjustment eligibility. While this might seem concerning, it’s important to note that a significant number of new eligible CPT/HCPCS codes are added annually. Overall, the number of eligible procedure codes has been steadily growing. 

Why Are These Codes Dropped? 

The removal of codes from risk adjustment eligibility can happen for various reasons, but one primary factor is the prevalence of "temporary codes"—specifically, Category III codes for emerging technologies. These codes are initially introduced to track the usage of new medical procedures and innovations. However, once these procedures become more established or reassessed, their eligibility for risk adjustment may be reconsidered. 

This means that at one point, claims for these emerging technology procedures were risk-adjustment eligible. However, once the codes are dropped, plans no longer receive risk-adjusted payments for these services, even if they continue to be widely used. 

Financial Implications for Medicare Advantage Plans 

One crucial aspect to consider is the financial impact of these changes. Many of the emerging technology codes that get dropped are associated with high-cost procedures. This creates a potential financial misalignment for Medicare Advantage (MA) plans, as they must continue covering these costly services without receiving the corresponding risk adjustment revenue that previously helped offset their costs. 

This impact is especially significant for specialty Medicare Advantage plans that cater to populations with higher utilization of emerging technology procedures. Plans specializing in areas like advanced cardiac care, oncology, or neurological interventions may feel the financial strain more acutely. Without proper adjustments, the loss of risk adjustment revenue for these procedures could lead to increased financial pressure on plans serving high-risk populations. 

How Are Medicare Advantage Organizations Adapting? 

A key question arises: how do Medicare Advantage organizations track these added and dropped codes and assess their impact on balancing risk-adjusted capitation and expenditure? 

  • Do MA plans have dedicated teams monitoring these changes? 

  • How do they adjust their financial models when previously eligible codes are removed? 

  • Are there strategic shifts in care management or reimbursement structures to account for these losses? 

Final Thoughts 

The evolution of risk adjustment eligible procedure codes is an ongoing process, reflecting advancements in medical technology, shifts in healthcare policy, and financial considerations within the Medicare Advantage space. As these changes continue, it’s critical for MA plans, healthcare providers, and policymakers to stay ahead of the curve and develop proactive strategies for managing their financial and operational impact. 

What are your thoughts on these changes? How does your organization monitor and adapt to shifts in risk adjustment eligibility? Let us know in the comments! 

Exploring CMS’s 2026 Advance Notice: Key Updates for Medicare Advantage and Part D Programs

The Centers for Medicare & Medicaid Services (CMS) has released the Advance Notice of Methodological Changes for Calendar Year 2026, unveiling updates to payment methodologies for Medicare Advantage (MA) Capitation Rates and Part C and Part D Payment Policies. These changes are designed to refine payment accuracy, improve beneficiary outcomes, and align with evolving healthcare needs. Below, we summarize the key highlights and their significance. 

Key Highlights of the 2026 Advance Notice 

1. Medicare Advantage Capitation Rates 

  • Growth Rate: CMS proposes a 5.93% effective growth rate, reflecting increases in Fee-for-Service (FFS) trends. This rate is the highest in nine years, addressing higher claims costs and loss ratios experienced by Medicare carriers. 

  • Risk Adjustment Model Transition: CMS will fully implement the 2024 CMS-HCC model for risk score calculations, ensuring improved accuracy in diagnosing and predicting costs. 

  • Medical Education Costs: The phase-in of adjustments for indirect medical education (IME) costs will be completed in 2026. While this reduces growth rates slightly, it enhances payment precision. 

2. Part D Program Updates 

  • Annual Out-of-Pocket (OOP) Cap: CMS will introduce a $2,100 cap on annual OOP prescription drug costs for beneficiaries, as mandated by the Inflation Reduction Act (IRA). This provides significant financial relief for enrollees. 

  • Manufacturer Discount Program: Replacing the Coverage Gap Discount Program, manufacturers will now provide a 10% discount in the initial coverage phase and a 20% discount in the catastrophic phase for applicable drugs. 

  • Risk Adjustment Updates: Adjustments to the Part D risk model reflect the updated benefit design, aligning scores with the $2,100 OOP threshold and incorporating changes to manufacturer discounts. 

3. Star Ratings Enhancements 

CMS plans updates to Star Ratings to prioritize clinical care, outcomes, and patient experience. 

  • New Measures: The Kidney Health Evaluation for Patients with Diabetes measure will debut in 2026. 

  • Returning Measures: “Improving or Maintaining Physical and Mental Health” metrics will return with increased weights in subsequent years. 

  • Weight Adjustments: Patient experience and complaints measures will see their weight reduced from 4x to 2x, reflecting a shift towards clinical outcomes. 

4. PACE (Programs of All-Inclusive Care for the Elderly) Adjustments 

CMS proposes a gradual transition for PACE organizations to adopt the updated CMS-HCC model fully by CY 2029, starting with a 10% blend of the 2024 model in 2026. This ensures a smoother shift while maintaining payment stability for these organizations. 

5. Data Systems and Normalization Factors 

  • Migration to AWS: The MARx system's transition to a cloud-based infrastructure is enhancing efficiency and scalability, though CMS acknowledges discrepancies in payment calculations, with fixes prioritized. 

  • Normalization Factors: CMS will use updated methodologies to calculate factors for Part C and Part D risk adjustment models, incorporating trends from both pre- and post-COVID-19 periods. 

Implications for Stakeholders 

These updates have far-reaching implications for Medicare plans: 

  1. Enhanced Payment Accuracy: By refining growth rates, risk adjustment models, and normalization factors, CMS ensures payments better reflect the needs of beneficiaries. 

  1. Increased Beneficiary Protections: The IRA-driven OOP cap and manufacturer discounts alleviate financial burdens for enrollees. 

  1. Focus on Quality: Updates to Star Ratings emphasize outcomes and equity, encouraging plans to prioritize patient-centered care. 

Next Steps for Organizations 

  1. Review and Analyze: Plans should evaluate the potential impact of proposed changes on operations, payment models, and beneficiary engagement. 

  1. Submit Feedback: CMS invites public comments on the Advance Notice by February 10, 2025, with final policies expected by April 7, 2025. Feedback can be submitted via Regulations.gov

  1. Prepare for Transition: Organizations should align operations to adopt new risk adjustment models and payment structures effectively. 

Conclusion 

The 2026 Advance Notice represents CMS’s commitment to improving Medicare Advantage and Part D programs through precise payment methodologies, innovative benefit designs, and a stronger focus on equity and outcomes. For stakeholders, these updates present opportunities to enhance care delivery while navigating new regulatory landscapes. 

Need Support?  
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Understanding the Proposed Updates to Part D Risk Scores for 2026

On January 10, 2025, the Centers for Medicare & Medicaid Services (CMS) published its Advance Notice of Methodological Changes for Calendar Year (CY) 2026. This update proposes adjustments to the RxHCC Risk Adjustment Models for Medicare Part D. These updates are critical for Medicare Advantage plans, 1876 Cost Plans, Prescription Drug Plans, and PACE organizations, as they directly impact payment policies and risk calculations. 

Here’s a breakdown of the key highlights from the memo and their implications. 

What Are Part D Risk Scores? 

Part D Risk Scores are a measure used to determine the health status of beneficiaries and the corresponding financial risk to plans. These scores are calculated based on diagnoses and claims data, ensuring fair payments to Medicare Advantage and Prescription Drug Plans. 

Key Updates in the 2026 Advance Notice 

  1. Risk Scores Posted on HPMS 

  1. CMS has made plan-level Part D risk scores available on the Health Plan Management System (HPMS)

  1. These scores are calculated using the RxHCC models proposed in the CY 2026 Advance Notice. 

  1. Scores can be accessed under: 

HPMS > Risk Adjustment Module > Proposed Risk Scores > Proposed PY 2026 Part D Model Risk Scores 

Plans can enter their Contract ID to retrieve specific contract data. 

  1. Data Used for Risk Score Calculations 

  1. The posted scores are based on PY 2023 data, using diagnoses from 2022 dates of service

  1. These calculations provide insights into how the proposed models will affect payments and risk adjustments. 

  1. Distinct Models for Non-PACE and PACE Organizations 

  1. Non-PACE Organizations: Scores are calculated using: 

  1. The 2025 RxHCC model currently in use. 

  1. Proposed and alternate RxHCC models outlined in the 2026 Advance Notice. 

  1. Diagnoses from encounter data and FFS claims, filtered with HCPCS-based filtering logic

  1. PACE Organizations: Scores use: 

  1. The 2025 RxHCC model for PACE. 

  1. Proposed and alternate models specific to PACE. 

  1. Diagnoses from RAPS, encounter data, and FFS claims, filtered with specialty-based filtering logic

Opportunities for Feedback 

CMS invites stakeholders to provide feedback on the proposed updates to the risk adjustment models. To submit comments: 

  • Enter the docket number CMS-2024-0360 in the search field. 

  • Follow the instructions to submit electronic comments. 

Why These Updates Matter 

  1. Improved Accuracy: The proposed updates refine how diagnoses are categorized and filtered, improving the accuracy of risk calculations. 

  1. Fair Payment Adjustments: By using multiple data sources (e.g., encounter data, FFS claims, and RAPS), the models ensure plans are fairly compensated based on the risk they manage. 

  1. Enhanced Support for PACE Organizations: Specialty-based filtering logic addresses the unique needs of PACE participants, who often require specialized care. 

Next Steps for Organizations 

  1. Access Your Plan Data: Retrieve your organization’s Part D risk scores from HPMS and analyze how the proposed changes impact your payments. 

  1. Engage with CMS: For technical questions, email riskadjustmentpolicy@cms.hhs.gov with the subject line: 2026 Advance Notice Part D Risk Scores

  1. Submit Feedback: Share your insights and concerns with CMS through Regulations.gov before the deadline for public comments. 

Conclusion 

The 2026 Advance Notice introduces critical updates to the Part D Risk Adjustment Models, emphasizing accuracy and fairness. Medicare Advantage and Prescription Drug Plans should review these changes carefully, as they play a pivotal role in determining financial risks and ensuring equitable payments. Engaging with CMS through feedback channels can further refine these models to better serve beneficiaries and stakeholders. 

Stay informed, analyze your risk scores, and contribute to shaping the future of Medicare payments! 

Reach out to us for more! 

Medicare Advantage and Prescription Drug System: January 2025 Payment Updates 

As we welcome the new year, the Centers for Medicare & Medicaid Services (CMS) has released crucial updates regarding the January 2025 payment cycle for Medicare Advantage and Prescription Drug Plans. Here’s everything you need to know about the latest developments and actions required. 

1. Reopening of the 2019 Final Part D Payment Reconciliation 

CMS has finalized the reopening of the 2019 Final Part D Payment Reconciliation, and the results are reflected in the January 2025 payments. You can find these adjustments under the Plan Payment Report (PPR), categorized as a special adjustment type labeled “PRS.” 

This update ensures that calculations from the 2019 reconciliation align with current standards, offering greater accuracy and fairness in reimbursements. 

2. MARx Data Cleanup: Payments Out of Sync with Enrollments 

A major data cleanup was conducted to resolve instances where payments were out of sync with enrollments. During late 2023 and early 2024, some beneficiaries who switched plans caused payments to incorrectly flow to their previous plan for the first month of enrollment in the new plan. 

Key Details: 

  • Adjustments for these discrepancies are included in the January 2025 Monthly Membership Report (MMR)

  • They are marked with Adjustment Reason Code (ARC) 94 and Cleanup ID CS1975228. 

These corrections aim to restore alignment between enrollment data and payment distributions. 

3. Premium Withhold and Reduction Fixes 

CMS identified an issue with the MARx system where updates to the Premium Payment Option (PPO) for Part C/D premiums and Part B premium reductions were not properly sent to the Social Security Administration (SSA). This resulted in incorrect premium amounts being withheld from beneficiaries in 2024 and January 2025. 

What to Expect: 

  • CMS is actively addressing this issue, and corrected updates will reflect in beneficiaries’ SSA benefits by February or March 2025

  • Most beneficiaries affected by this will receive a refund, which CMS anticipates will be credited to their SSA benefits. 

4. National Medicare Education Campaign (NMEC) User Fees for 2025 

In accordance with the Social Security Act (Section 1857(e)(2)), CMS will begin collecting National Medicare Education Campaign (NMEC) user fees in the January payment cycle. These fees are designed to cover costs associated with enrollment-related activities. 

  • MA-PD Plans: Fee rate set at 0.023%, with a total collection of $111.1 million

  • PDPs: Fee rate set at 0.024%, with a total collection of $9.7 million

These fees ensure that CMS continues to provide education and resources for beneficiaries and organizations alike. 

5. MARx Migration to Amazon Web Services (AWS) 

In July 2023, the MARx system transitioned to a cloud-based infrastructure on Amazon Web Services (AWS). This migration enhanced the system’s ability to process enrollment, premium, and payment data efficiently. 

However, CMS has acknowledged discrepancies in the calculation of Part C and Part D risk scores during this transition. To address this: 

  • Ongoing software fixes and data cleanups are being prioritized. 

  • Plans impacted by these issues are being tracked through master tickets to assess the scale and expedite resolutions. 

Questions regarding the MARx system can be directed to mapdhelp@cms.hhs.gov

6. Sequestration Suspension Adjustments 

While the suspension of sequestration has officially ended, CMS continues to apply sequestration rules for retroactive payment adjustments

  • Payments from May 2020 to March 2022 are not subject to sequestration. 

  • Adjustments for April to June 2022 include a 1% sequestration

  • Payments from July 2022 onward include a 2% sequestration

These rules ensure consistency and compliance with statutory requirements. 

By staying informed about these updates, Medicare Advantage and Prescription Drug Plan organizations can better align their operations with CMS standards, ensuring smoother processes and improved beneficiary outcomes in 2025. 

Reach out to us for more! 

Understanding Medicare Advantage Encounter Data Report Cards

Since 2019, the Centers for Medicare & Medicaid Services (CMS) have been issuing Encounter Data Report Cards to Medicare Advantage Organizations (MAOs). These report cards are essential tools that help MAOs assess the completeness and accuracy of their encounter data submissions. By highlighting areas where submission patterns may be below expectations, CMS provides MAOs with the opportunity to enhance their data reporting processes, ensuring compliance and improving the quality of care provided to beneficiaries. 

The Medicare Advantage Encounter Data Submission Performance Reports for the third quarter of 2024 are now accessible. These reports offer detailed insights into each organization's data submission performance, enabling MAOs to identify specific areas for improvement. Regular review of these reports is crucial for maintaining data integrity and aligning with CMS standards. 

To access your organization's Q3 2024 report, navigate through the Health Plan Management System (HPMS) as follows: 

  1. Log in to HPMS: Ensure you have the necessary credentials to access the system. 

  1. Navigate to the Encounter Data Section

  1. Risk Adjustment > Encounter Data > Submission Performance > 2024 November Update 

This pathway will lead you to the latest submission performance reports. 

For detailed guidance on accessing and interpreting these reports, CMS provides a comprehensive job aid, which can be found here: 

Cssc Operations 

If you have any questions or require further assistance regarding your Submission Performance Report, please reach out to CMS directly. You can email the Risk Adjustment Operations team at RiskAdjustmentOperations@cms.hhs.gov. To ensure a prompt and accurate response, include the subject line: "Encounter Data Submission Performance Report, Q3 2024 Update." 

Regular analysis of these reports is vital for MAOs to maintain compliance with CMS requirements and to enhance the quality of data submissions. By proactively addressing any identified issues, organizations can contribute to the overall effectiveness and efficiency of the Medicare Advantage program. 

For more information on best practices for encounter data submission, CMS offers guidance to assist organizations in meeting submission requirements: 

HHS.gov 

Staying informed and utilizing these resources will aid in ensuring the accuracy and completeness of your encounter data submissions. 

Reach out to us for more!