The Centers for Medicare and Medicaid Services (CMS) issued a proposed rule in November 2018 which contained provisions regarding risk adjustment data validation (RADV) audits. In particular, this proposed rule removed what is known as the fee-for-service (FFS) adjuster, which is a mechanism for adjusting RADV audit recoveries to ensure actuarial equivalence between FFS and Medicare Advantage payments. This white paper evaluates the CMS conclusion that an FFS adjuster is not appropriate and shows that using CMS’ methodology and data but adjusting for certain issues with that methodology, as described in the paper, leads to a conclusion that an FFS adjuster is required and is significantly greater than zero.

This paper was commissioned by America's Health Insurance Plans.