Medicare Advantage (MA) is facing one of its most significant regulatory pivots in years. At the center of this shift, there is a renewed focus on how risk adjustment is used to determine plan payments. Under the leadership of CMS Administrator Mehmet Oz, the agency has made it clear that diagnoses used to calculate MA risk scores must be directly linked to actual care. Diagnoses that exist only on paper, without treatment, clinical follow-up, or physician engagement, can no longer justify higher reimbursements.
Risk adjustment plays a central role in the financial engine of MA. CMS pays plans a per member per month (PMPM) amount, adjusted based on the clinical complexity of each enrollee. Those adjustments are driven by diagnosis codes reported through claims or validated encounter data. The goal is to ensure that plans managing sicker populations receive appropriate compensation. But CMS has raised concerns that some plans are inflating these scores by capturing more diagnoses—often through retrospective chart reviews or in-home assessments—without evidence of care delivery.
Under Oz’s direction, CMS has prioritized closing that gap. The agency is sharpening oversight to ensure every condition included in a member’s risk profile is clinically relevant and actively managed. This reflects findings from audits and industry analyses showing that plans may be overstating risk, especially when using health risk assessments (HRAs) not tied to subsequent medical care.
The use of HRAs has become a flashpoint in this debate. A 2023 Kaiser Family Foundation report found that HRAs accounted for a substantial share of diagnosis codes used in risk adjustment, even when those conditions were not later confirmed, treated, or mentioned in medical records. These assessments are often completed outside traditional clinical settings, such as during home visits or phone calls, creating questions about their validity when not followed by a provider evaluation.
CMS is also examining how risk coding intersects with care access. While MA plans may document high-risk scores, many also impose aggressive prior authorization policies that restrict services. As reported by PoliticoPro, CMS leadership has taken issue with this disconnect, pressing plans to demonstrate that reported conditions are being treated and that members can access necessary care without delay.
In response to growing scrutiny, insurers have defended their use of HRAs as proactive tools to support early intervention and chronic condition management. In an article from AHIP, the group highlighted cases in which HRAs have surfaced undiagnosed diabetes, unmanaged hypertension, and unmet behavioral health needs. However, AHIP also acknowledged that HRAs should complement, not replace, ongoing care coordination and that diagnoses must be confirmed and followed up by clinicians.
Efforts are also underway to address concerns around care delays. According to a 2023 AHIP announcement, several large plans have begun implementing reforms to streamline prior authorization, using automation and real-time decision tools to speed up approvals and reduce administrative burdens. While this helps, CMS is signaling that more is required, particularly in aligning utilization policies with how plans define patient risk.
For provider organizations operating within MA networks, the message is equally urgent. Diagnoses used for risk adjustment must be current, specific, and supported by clinical documentation, not just pulled forward from older records or third-party assessments. For example, if a provider codes congestive heart failure or chronic kidney disease, there must be a clear record of the patient’s symptoms, test results, treatment plan, or monitoring.
These expectations require tighter coordination between clinical teams, revenue cycle departments, and compliance leaders. Documentation practices must ensure that each diagnosis has a medical rationale and is connected to care delivery. Internal audits should validate that risk-scoring codes can withstand CMS’s increasingly rigorous Risk Adjustment Data Validation (RADV) reviews.
Finance leaders must also account for these changes in their forecasting. Budgets should consider the potential for clawbacks where risk scores are challenged. Delegated groups in value-based arrangements need contractual protections and shared responsibilities around coding integrity. And education for physicians is essential. Many still don’t realize how their documentation directly affects patient care, plan payments, and regulatory exposure.
Taken together, these moves signal a new era of accountability for MA plans and their provider partners. Risk coding is no longer a technical exercise or revenue optimization tool. It must reflect the clinical reality of patients and the care they receive. Under Oz’s leadership, CMS is reinforcing that point across every layer of the system.
Plans and providers that invest in the infrastructure, training, and oversight to align coding with care will not only avoid penalties, but they’ll also be better positioned to improve outcomes and deliver value in a more transparent MA environment.