The Centers for Medicare & Medicaid Services (CMS) just announced a sweeping expansion of its auditing program for Medicare Advantage (MA) plans.
Moving forward, CMS will audit all eligible MA contracts annually in newly initiated audits and expedite pending audits from 2018 through 2024.
This marks a dramatic shift in how CMS approaches risk-adjusted payments in MA, and it’s about more than compliance.
It’s a strategic realignment aimed at tightening oversight, increasing financial accountability, and reshaping the way MA operates at scale.
Why It Matters Now
At the core of the MA program is risk-based reimbursement. Plans receive higher payments for patients with more complex conditions, based on the diagnoses they submit.
These submissions are verified through Risk Adjustment Data Validation (RADV) audits.
But until now, those audits have been limited in number and slow to conclude.
CMS’s last significant overpayment recovery effort targeted data from 2007. Meanwhile, estimates from both the federal government and MedPAC suggest MA plans may be overbilling by anywhere from $17 billion to $43 billion per year.
With this new expansion, CMS is aiming to accelerate audit timelines and close that gap.
According to Administrator Mehmet Oz, “It is time CMS faithfully executes its duty to audit these plans and ensure they are billing the government accurately.”
What’s Changing
CMS’s audit approach is expanding on multiple fronts:
- All eligible MA plans audited annually in newly initiated audits (roughly 550 plans per year)
- Audit volume per plan increases, from 35 records to up to 200, depending on plan size
- Backlog addressed, with audits from 2018–2024 to be completed by early 2026
- Technology enhanced, using advanced systems to flag unsupported diagnoses faster
- Workforce scaled, with the medical coding team growing from 40 to 2,000 coders
This increase in scope is designed to make audit findings more statistically robust and actionable under the RADV final rule, which allows extrapolation of audit results to broader plan payments.
Bigger Than Compliance
While the announcement focuses on reducing fraud and recovering funds, the broader impact will be operational.
For MA plans, this means greater audit exposure, higher documentation expectations, and tighter alignment between coding practices and medical necessity.
For providers participating in MA networks, the pressure to accurately document and justify diagnoses will only grow.
And for patients, this could translate into more scrutiny on what care gets authorized and how quickly.
A System-Wide Wake-Up Call
This isn’t just a policy update. It’s a signal.
CMS is putting weight behind the need for financial integrity in a rapidly growing part of the healthcare system.
Medicare Advantage enrollment has exploded in the last decade. With nearly half of all Medicare beneficiaries now enrolled in MA plans, the stakes are high for payers, providers, and taxpayers alike.
CMS’s expanded audit agenda also includes collaboration with the HHS Office of Inspector General to recover unresolved overpayments identified in past audits.
That means this isn’t just about future years, it’s retroactive.
What to Watch As CMS Plans Audits of All MA Plans
This rollout raises several questions that will define its impact:
- How will plans respond operationally to increased record requests and scrutiny?
- Will documentation standards tighten across provider networks?
- How will this influence MA bidding, benefit design, and utilization management?
- Will payers shift strategies as audit risk grows?
As audits ramp up, so will industry responses. Technology vendors, revenue cycle teams, and risk adjustment vendors will play an increasingly central role in helping plans and providers navigate the new landscape.
Bottom Line
CMS is making it clear: the Medicare Advantage program must prove the accuracy of its payments. For plans, this is a pivot point.
The days of limited audits and long delays are over.
Whether you operate a plan, contract with one, or support the coding and documentation behind MA billing, now’s the time to adapt.
Because in this new audit era, scale, speed, and accuracy are no longer nice-to-haves.
They’re the baseline.
