CMS Finalizes Risk Adjustment Policies to Combat Medicare Advantage Overpayments

The Centers for Medicare and Medicaid Services (CMS) has finalized risk adjustment policies in a final rule to prevent overpayments to Medicare Advantage Organizations (MAOs).[0] On Feb. 1, the CMS is slated to finalize the Risk Adjustment Data Validation rule, which would increase the amount of overpayments Medicare Advantage insurers must return to the government.[0]

Chiquita Brooks-LaSure, Administrator of the Centers for Medicare and Medicaid Services (CMS), declared that CMS is devoted to shielding individuals with Medicare and being a reliable guardian of taxpayer money.[1] In this rule, we are striving to protect Medicare access for the present and future. We have taken into account a great deal of feedback from interested parties and created a well-thought-out system for monitoring the Medicare Advantage program that is comparable to how we oversee the usual Medicare.[2]

HHS Secretary Xavier Becerra said, “Protecting Medicare is one of my highest responsibilities as Secretary, and this commonsense rule is a critical accountability measure that strengthens the Medicare Advantage program. CMS has a responsibility to recover overpayments across all of its programs, and improper payments made to Medicare Advantage plans are no exception.”[2]

Private Medicare carriers generated an estimated $17 billion through overpayments last year, according to a report the Medicare Payment Advisory Commission (MedPAC) issued this month.[0] MAOs are required to submit data to CMS about patient diagnoses and the agency can audit the data to determine if Medicare over- or underpaid for the diagnoses.[1]

The implemented policies will enable CMS to direct their audits towards MAOs that present the greatest risk of receiving improper payments.[1] However, CMS will not impose major penalties until audits for payment years 2018 and beyond are conducted.[3]

Matt Eyles, president of the trade group AHIP, said in a statement, “Our view remains unchanged: This rule is unlawful and fatally flawed, and it should have been withdrawn instead of finalized.[4] This rule will be detrimental to the elderly, exacerbate health disparities, and be prejudicial towards those who require the most medical attention.[5] Additionally, the rule would cause seniors and taxpayers to pay higher prices, those who opt for MA to receive fewer benefits, and fewer plan options to be available in the future.[5] It is our hope that CMS will continue to collaborate with us in order to ensure the health and economic wellbeing of the American people through our joint public-private partnership.[5]

0. “CMS RADV rule increases Medicare Advantage, provider audits” Modern Healthcare, 24 Jan. 2023,

1. “HHS Issues Final Rule to Protect Medicare, Strengthen Medicare Advantage, and Hold Insurers Accountable” EIN News, 30 Jan. 2023,

2. “HHS Finalizes Medicare Advantage Risk Adjustment Data Validation Program Rule”, 30 Jan. 2023,

3. “Government Lets Health Plans That Ripped Off Medicare Keep the Money” Kaiser Health News, 30 Jan. 2023,

4. “Medicare Advantage plans lose out in final RADV audit rule that ditches fee-for-service adjuster” FierceHealthcare, 30 Jan. 2023,

5. “CMS issues final rule on the Medicare Advantage risk adjustment program” Healthcare Finance News, 30 Jan. 2023,