What are the implications of failing a RADV audit for a health plan?

Failing a RADV audit can have significant repercussions for a health plan, particularly in terms of potential financial penalties and loss of membership. When a health plan does not successfully validate its risk adjustment data, it may be subjected to monetary penalties that can directly affect its financial stability. These penalties often arise from discrepancies between reported data and the actual health status of members, which can lead to reduced risk adjustment payments from Medicare.

Additionally, a RADV audit failure can undermine the trust of current and prospective members. If a health plan is found to be non-compliant or inaccurately representing risk data, it may experience a loss of membership as individuals seek more reliable and trustworthy options. This dual impact—the financial ramifications and the potential decrease in enrollment—illustrates why failing a RADV audit is a serious concern for health plans. Being part of a well-performing health plan is crucial for members, and an audit failure can tarnish the organization’s reputation, further complicating its ability to maintain and attract members.