The mechanism: CMS pays Medicare Advantage plans a risk-adjusted rate per enrollee — sicker-coded members mean fatter checks from Washington. The agency's own estimate puts unsupported diagnosis coding at roughly $17 billion a year in overpayments, and CMS has now moved from auditing about 60 MA contracts annually to a plan that audits all ~550 eligible contracts, with sample sizes up to 200 records per plan instead of 35. A federal court vacated the extrapolation methodology CMS wanted to use to claw back money across a plan's whole membership, which caps near-term recoupment risk — but the audit volume increase is proceeding regardless, and it changes the coding-aggressiveness calculus for every plan going forward. The less a company's earnings depend on MA risk scores, the less this bites.
Who cashes in: