The Centers for Medicare & Medicaid Services (CMS) has released new audit protocol changes for Medicare and Medicaid plans. These changes, which went into effect on January 1, 2023, are designed to ensure health plans are accurately reporting their costs and that they are not overcharging the government. 

The changes include: 

  • Using a new risk adjustment data validation (RADV) audit methodology 
  • No longer applying a fee-for-service (FFS) adjusted to RADV audits
  • Requiring plans to submit documentation to support their claims 

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The new audit rule changes have been met with mixed reactions from the industry, with some plans expressing concern that the changes will be too burdensome, and that they will lead to increased costs, while others have argued that the changes are necessary to protect the government from fraud and abuse. 

Some of the key changes include: 

  • Increased focus on quality: CMS will be increasing its focus on quality in its audits. Plans will be required to provide more information about their quality improvement activities. 
  • More scrutiny of financial arrangements: CMS will be scrutinizing financial arrangements between plans and providers more closely. Plans will need to be able to demonstrate that these arrangements are in the best interests of beneficiaries. 
  • Increased use of data analytics: CMS will be using data analytics more extensively in its audits. Plans will need to be prepared to provide data to support their claims. 

These changes are significant and will have a major impact on Medicare and Medicaid plans. Plans need to take steps now to prepare for these changes. Here are some tips for preparing for the new CMS Audit protocol changes: 

  • Review your quality improvement activities: Make sure that you have a robust quality improvement program in place. CMS will be looking for evidence of your efforts to improve the quality of care for beneficiaries. 
  • Review your financial arrangements: Make sure that your financial arrangements with providers are in compliance with CMS regulations. CMS will be looking for evidence that these arrangements are fair and reasonable. 
  • Get familiar with data analytics: CMS will be using data analytics more extensively in its audits. Make sure that you are familiar with data analytics and that you have the tools and resources in place to collect and analyze data. 

By taking these steps, you can help to ensure that your plan is prepared for the new CMS audit protocol changes. 

In addition to the changes mentioned above, CMS has also made a number of other changes to its protocols. These changes include: 

  • Changes to the process: CMS has made a number of changes to the process, including: 
    • Increasing the number of pre-payment audits 
    • Increasing the use of risk-based sampling 
    • Expanding the scope of audits to include new areas, such as quality improvement activities 
  • Changes to the types of audits: CMS has also made a number of changes to the types of audits that it conducts. These changes include:  
    • Increasing the number of comprehensive audits 
    • Increasing the use of targeted audits 
    • Expanding the scope of audits to include new areas, such as quality improvement activities 

In order to align their operations with the aforementioned changes, Medicare and Medicaid plans can make use of the below given tips to prepare themselves: 

  • Stay up-to-date on the latest changes: CMS regularly updates its audit protocols. It is important to stay up-to-date on the latest changes so that you can be prepared for any audits that your plan may face. 
  • Develop a strong audit response plan: Having a strong audit response plan in place will help you to respond to audits effectively and efficiently. Your audit response plan should include:  
    • A process for identifying and responding to audit findings 
    • A process for tracking audit progress 
    • A process for communicating with CMS 

 Inovaare knows the world of Medicare, Medicaid and Commercial health plans from over 125 years of combined hands-on Regulatory Compliance department oversight. Our consultative approach guides health-plan compliance teams through everything needed to sustain a continuous audit-ready status and the Inovaare platform empowers them to submit CMS-compliant reports with the touch of a button. If you would like an in-depth discussion on how to meet the challenges of dynamic landscape of regulatory changes and stay compliant at all times, please call us at 1.408.850.2235 or  Contact Us