Which statement about financial penalties after a RADV audit is correct?

The correct choice asserts that financial penalties from a RADV audit can be averaged across the entire plan membership. This is important because it reflects a broader approach to addressing the financial impact of the audit findings. Averaging penalties allows for a more equitable distribution of the financial burden among all members of the plan rather than targeting individual members, which could create significant challenges and disparities.

This approach helps mitigate the potential financial strain on specific members and prevents disproportionate penalties that could arise from the audit's focus on particular cases or patients. It emphasizes the collective responsibility of the plan in managing risk adjustment data accurately and reinforces the idea that the audit's findings impact the entire organization rather than just isolated accounts.

Considering this, the other options do not reflect the comprehensive nature of financial penalties as dictated by RADV audit regulations. For instance, penalties are not confined to just individual members, nor are they exclusively based on recent patient admissions, and while they may be reviewed over time, their application is broader and usually involves the totality of plan membership rather than just an averaged basis over an extended timeframe.