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Many health plans still rely on outdated, disconnected processes: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.