CMS Announces Massive Expansion of Medicare Advantage Audits: What Healthcare Providers Need to Know
The Centers for Medicare & Medicaid Services (CMS) has recently announced a game-changing expansion of its Medicare Advantage (MA) audits strategy that will fundamentally reshape the compliance landscape for healthcare providers. This aggressive new approach signals the Trump Administration’s commitment to combating fraud, waste, and abuse across federal healthcare programs.
The New Reality: All-Encompassing Audit Coverage
Starting immediately, CMS will audit all eligible Medicare Advantage contracts for each payment year in newly initiated audits—a dramatic increase from the previous ~60 MA plans audited annually to approximately 550 plans. This represents the most comprehensive audit expansion in Medicare Advantage history.
“We are committed to crushing fraud, waste and abuse across all federal healthcare programs,” said Dr. Mehmet Oz, CMS Administrator. “While the Administration values the work that Medicare Advantage plans do, it is time CMS faithfully executes its duty to audit these plans and ensure they are billing the government accurately.”
The Numbers Tell the Story
The financial implications are staggering. Federal estimates suggest MA plans may overbill the government by approximately $17 billion annually, with the Medicare Payment Advisory Commission (MedPAC) placing this figure as high as $43 billion per year. CMS’s completed audits for payment years 2011–2013 already identified between 5% and 8% in overpayments.
Technology-Driven Transformation
CMS’s strategy includes three critical components:
- Enhanced Technology: Advanced systems will efficiently review medical records and flag unsupported diagnoses, dramatically accelerating the audit process.
- Massive Workforce Expansion: CMS will increase its team of medical coders from 40 to approximately 2,000 by September 1, 2025—a 50-fold increase in auditing capacity.
- Increased Audit Scope: The agency will expand from auditing 35 records per health plan annually to between 35 and 200 records per plan, ensuring more reliable and extrapolatable findings. This is to help ensure CMS’s audit findings are more reliable and can be appropriately extrapolated as allowed under the RADV final rule.
The Compliance Ripple Effect
This Medicare Advantage audit expansion sends a clear signal that heightened scrutiny is the new normal across all healthcare sectors. Home health agencies and hospice providers should expect similar intensification of audit activities and compliance requirements.
The administration’s commitment to expediting completion of audits for payment years 2018 through 2024 by early 2026, combined with collaboration with the HHS Office of Inspector General to recover past overpayments, demonstrates that regulatory enforcement is entering a new, more aggressive phase.
Preparing for the New Compliance Landscape
As CMS ramps up its audit capabilities and scope, healthcare providers across all sectors must strengthen their compliance foundations. The same Risk Adjustment Data Validation (RADV) principles driving these Medicare Advantage audits—ensuring diagnoses used for payment are properly supported by medical records—apply broadly across healthcare compliance.
Organizations that proactively address compliance gaps, implement robust documentation practices, and prepare for increased scrutiny will be best positioned to navigate this evolving regulatory environment successfully.
How SimiTree Can Help You Navigate Increased Regulatory Scrutiny
At SimiTree, we understand that today’s compliance challenges require expert guidance and proactive strategies. As regulatory scrutiny intensifies across all healthcare sectors, our comprehensive compliance solutions help home health and hospice providers stay ahead of evolving requirements.
Understanding Today’s Compliance Challenges
Agencies face unprecedented scrutiny through multiple audit types:
- Targeted Probe and Educate (TPE) Audits: Three failed rounds can fast-track certification loss
- Recovery Audit Contractor (RAC) Reviews: Focusing on improper payments and length of stays
- Supplemental Medical Review Contractor (SMRC) Audits: Often triggered by previous audit findings
- Unified Program Integrity Contractor (UPIC) Reviews: Most comprehensive government scrutiny
- Medicaid Review Audits: State-specific compliance requirements
Comprehensive Compliance Solutions
Active Response & Defense
- ADR Management
- Pre and Post Bill Audit Assistance
- Denials and Appeals Support
- Expert Witness Testimony
- Staff Training and Education
- Quality Measure Improvement
Prevention & Preparation
Our CHAP and ACHC certified consultants provide:
- Mock Surveys
- Survey Readiness
- Plan of Correction Development
Our Compliance Certified consultants provide:
- Compliance Program Risk Assessments
- HIPAA Privacy Risk Analysis
Don’t wait for an audit to discover compliance gaps. Contact SimiTree today to strengthen your organization’s compliance foundation and prepare for the new era of regulatory enforcement.
Learn More: Visit SimiTree.com for comprehensive compliance solutions tailored to your organization’s needs.