Medicare Advantage Plan Audits Versus Traditional Medicare

Medicare Advantage plans audit their network physicians under authority that comes from the physician's own provider contract, not from the Medicare regulations that govern a traditional fee-for-service audit. A practice can face two different audit and appeal experiences depending on which program covers the patient: a Recovery Audit Contractor or Unified Program Integrity Contractor working through the federal five-level Medicare appeal process, or a Medicare Advantage plan working through its network agreement, its own Special Investigations Unit, and, at the plan level, the Risk Adjustment Data Validation audits the Centers for Medicare & Medicaid Services (CMS) runs against the plan's contract. The distinction decides who reviews the chart, what deadline applies, and whether the dispute ever reaches a federal administrative law judge.

Two Audit Programs, Two Sources of Authority

A traditional Medicare audit runs through a Medicare Administrative Contractor, a Recovery Audit Contractor (RAC), or a Unified Program Integrity Contractor, each authorized by the Medicare regulations to send an additional documentation request and review the claim against the applicable coverage rule. Medicare Advantage works differently. CMS's own audit of a Medicare Advantage organization is a Risk Adjustment Data Validation (RADV) audit under 42 C.F.R. § 422.310, testing whether the Hierarchical Condition Categories the plan submitted for risk-adjusted payment are supported in the medical record. That audit runs against the Medicare Advantage organization's contract, not against the treating physician. The record request that reaches the physician's office instead comes from the plan or its audit vendor, asking the practice to produce the chart behind a diagnosis, an obligation the network participation agreement creates rather than a Medicare regulation. A federal court vacated CMS's authority to extrapolate RADV findings across a plan's full contract on September 25, 2025 (Humana v. Becerra, N.D. Tex.), CMS is appealing that ruling to the Fifth Circuit, and CMS still expects to issue the first Payment Year 2018 RADV findings in mid-2026.

Provider Agreements Set the Ground Rules

Beyond RADV, a Medicare Advantage plan also audits its network physicians directly, often through an internal Special Investigations Unit that can open on a data-driven flag rather than a formal audit notice. The physician's obligation to produce records, and the plan's right to deny claims, place claims on prepayment review, or demand a recoupment, comes from the provider agreement's audit clause, not from a Medicare regulation. The consequences can include a recoupment demand, a wave of claim denials, or termination for cause, and each is governed by whatever notice period, cure right, and dispute procedure that specific contract sets out. Many agreements route a disputed finding to the plan's internal grievance process and then to binding arbitration rather than to any outside reviewer.

Only one of these audit programs guarantees a hearing before a federal administrative law judge: the one operating under Medicare regulation, not the one operating under the physician's own contract.

Appeal Rights Split by Program and Contract Status

A traditional Medicare audit finding carries the federal five-level appeal process set out at 42 C.F.R. § 405.904: redetermination, reconsideration by a Qualified Independent Contractor, a hearing before an administrative law judge, review by the Medicare Appeals Council, and, above a dollar threshold, federal district court. That process applies regardless of which contractor issued the finding. A Medicare Advantage audit finding against a contracted physician carries no equivalent federal right; the physician's recourse is whatever the network agreement provides, most often the plan's internal appeal process, sometimes ending in arbitration. A non-contracted physician has a narrower federal track instead: a plan-level appeal, automatic referral to CMS's Part C independent review entity, and, only if the disputed amount meets the threshold in 42 C.F.R. § 422.600, an administrative law judge hearing and judicial review.

Why Early Legal Counsel Is Critical

It is critical that physicians and practice groups retain experienced healthcare defense counsel promptly upon receiving a Medicare Advantage audit request, a RADV-related records request from a plan, or a Recovery Audit Contractor's documentation request. Early legal intervention can protect the practice's rights, ensure appropriate responses to the request, avoid inadvertent admissions, and preserve the specific appeal or dispute-resolution rights that apply, which differ by program and by contract. Delaying legal representation can significantly affect the outcome of a matter and expose the practice to unnecessary risk.

How Health Law Alliance Can Help

Health Law Alliance has represented 2,500+ clients over 25+ years, including physicians and practice groups facing both traditional Medicare audits and Medicare Advantage plan audits. Our Medicare audit defense attorneys review the audit notice to identify which program and which appeal or dispute track applies, respond within the applicable deadline, and represent the practice through redetermination, plan-level appeal, arbitration, or federal court, whichever the specific audit requires. Contact Health Law Alliance for a free, confidential consultation.