Certified Risk Adjustment Coder (CRC)

What does it mean when the results of a RADV audit are extrapolated across all members of the plan that was audited?

1. Financial penalties will be limited to each specific member

2. Financial penalties will be averaged over the plan membership

3. Financial penalties will be imposed across the plan membership

4. Financial penalties will not be imposed until two years post audit

The correct answer is: Financial penalties will be imposed across the plan membership

When the results of a Risk Adjustment Data Validation (RADV) audit are extrapolated across all members of the audited plan, it means that the findings and discrepancies identified in the audit are applied to the entire member population of that plan. This process is used to estimate the overall impact on risk-adjusted payment amounts based on the number of inaccuracies found during the audit. Extrapolation is a method used during audits to determine the potential financial implications for the broader plan based on a sample of audited data. If, for instance, the audit reveals a certain percentage of errors in the claims or medical records of the sampled members, that percentage can be applied to the total membership to predict the total financial impact. This approach allows for a more comprehensive understanding of the plan's compliance with Medicare risk adjustment regulations and ensures that any financial penalties are reflective of the entire population rather than just the sampled individuals. This can lead to substantial financial implications for the plan, as it means that the penalties are not just limited to a small subset of audited members, but instead affect the entire member base.