CMS has substantially broadened its 2020 risk adjustment data validation - RADV - audit program, according to a report published this week by Leerink. The agency will review 470 distinct Medicare Advantage contracts for the 2020 period, a significant expansion from the 58 contracts reviewed in 2018.
Processing of the audits is scheduled to begin in April 2025. For each named contract, CMS will examine between 35 and 200 members' medical records as part of the validation process.
UnitedHealth Group emerges from Leerink's analysis as the single most exposed plan on an absolute basis. The firm reports that 60 of UnitedHealth's contracts are included in the 2020 audit, collectively accounting for roughly 92% of the company's Medicare Advantage membership of more than 6 million members in 2020. Notably, UnitedHealth had no contracts audited in the 2018 RADV review.
Humana is also facing a markedly larger scope of review in 2020 compared with 2018. The report shows 42 of its contracts are slated for audit, up from 9 in 2018, and those named contracts represent about 99% of Humana's membership covered by the review.
Leerink highlights that every publicly traded Medicare Advantage plan is represented among the contracts selected for the 2020 RADV audit. Several plans that were excluded from the 2018 audit - Alignment Healthcare, Centene, UnitedHealth, and Clover Health - now have contracts named in the 2020 review.
Given the anticipated volume of documentation and appeals, CMS has retained a third-party litigation contractor. The agency expects the contractor may need to process between 20 million and 200 million pages of PDF files to support as many as 100,000 Hierarchical Condition Category - HCC - appeals. At this stage, CMS has not decided whether audit findings will be extrapolated at the contract, company, or sampling level.
Leerink also reviewed risk score data for 2024 and found largely stable trends across its coverage universe. The analysis shows UnitedHealth and Elevance Health maintain the highest weighted average risk scores, a pattern Leerink attributes to greater dual-eligible special needs plan - D-SNP - exposure. By contrast, CVS Health records the lowest weighted average risk score within the firm's covered set of plans, despite a slight increase from 2023.
Implications for market participants - The enlarged audit scope and the significant representation of major Medicare Advantage plans mean the upcoming reviews could influence regulatory interactions and reserve planning for the insurers named. The timeline and the unresolved question of extrapolation methodology leave material uncertainty about final outcomes and potential financial impact.