CMS is reshaping how health plans approach payment integrity. Faster regulatory cycles along with heightened scrutiny of improper payments have resulted in expanded audits for providers and payers. This represents a greater emphasis on prevention and real-time intervention as increasing pressure on payers to ensure medical claims are reimbursed accurately.
Today’s challenge goes far beyond understanding new regulations, it’s knowing how to operationalize them. As CMS requirements continue to evolve and audit activity intensifies, health plans must act quickly to keep pace with an increasingly complex and fast-changing regulatory environment.
The stakes are higher than ever, placing greater pressure on health plans to strengthen provider collaboration, operationalize policy changes efficiently, and proactively reduce compliance risk while protecting financial performance
Today’s dynamic regulatory landscape
A surge of federal policy changes is reshaping the regulatory environment at an unprecedented pace for health plans. From the Trump administration’s evolving agenda to new legislation, updated CMS and Medicaid guidance along with increased enforcement and financial penalties, the consequences of noncompliance are growing. In this climate, a proactive approach to payment integrity and regulatory readiness is no longer optional—it is critical to the future of health plans.
Philo Hall, a member of Epstein Becker Green, a national law firm focused on healthcare, explained that policy changes are coming from multiple directions. Congress has enacted new Medicare legislation, and CMS continues to update payment and program rules through its annual regulations.
Meanwhile, the One Big Beautiful Bill Act (OBBBA) made the most sweeping changes to Medicaid in years, including stricter eligibility and provider enrollment requirements, work requirements, new constraints on state Medicaid programs and reduced funding.
Kevin Malone, also from Epstein Becker Green, observed that the original Medicare fee-for-service structure remains relevant from a program payment integrity perspective. This applies especially for health plans with multiple product lines including commercial ACA products, Medicare Advantage (MA) and Medicaid managed care and dual eligible special needs plans.
“CMS isn’t bringing program integrity risks to us as the payer through the contract; they’re more focused on risk adjustment, payment integrity and marketing payment integrity from the plan directly, “said Mr. Malone. To decrease risk, he suggests that MA plans need to monitor their own payment integrity and even impose payment suspensions.
Operationalizing regulatory changes
Cereasa Horner, Director of Policy and Payment Integrity at CERIS, stressed that leaders need to understand how these regulations produce operational ripple effects.
One of the first steps to achieve this is conducting an internal risk assessment to identify operational and audit-related issues and determine where further action is needed.
Organizations can also take two other paths. First is a legal path that involves identifying key risks related to regulations, along with strategies to mitigate these risks.
The second path is determining what organizational changes to make. “Don’t look at regulatory changes as footnotes,” Ms. Horner advised. “Think about how you’re going to operationalize them.”
One area for health plan leaders to focus on is Risk Adjustment Data Validation (RADV) audits. Audits conducted before 2018 are now closed but plans must be able to access and analyze their audit results. For audits initiated from 2018 to 2021, there is a backlog. Many are still active and responding to document requests is resource intensive.
For audits initiated after 2022, health plans can make changes in documentation, coding and internal controls to streamline processes, minimize mistakes and decrease risks.
Building blocks, not road blocks
To minimize risks related to these new laws and regulations, including overpayment, health plans need to engage and coordinate with legal counsel.
Health plans also need to allocate resources based on areas of greatest risk. For example, organizations can establish one team to respond to retrospective audit requests while dedicating another to preparing for future audits. That forward-looking team can improve documentation and coding accuracy, close process gaps and strengthen quality assurance and validation efforts. It’s also important to align with providers when it comes to payment integrity. Sharing clear, detailed payment integrity policies that are aligned with CMS rules is crucial.
The goal is to mitigate what Ms. Horner calls “provider abrasion” and ensure that health plans’ relationships with providers don’t become adversarial and are instead defined by alignment and collaboration.
“You want to make sure you have building blocks with your providers, rather than road blocks,” Ms. Horner said. “There needs to be collaboration between all functions within the plan — network, compliance, legal and program integrity.”
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