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Medicare Is Tightening Its Belts: Get Ready for More Medical Coding Audits

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Hemant Apte, Chief Executive OfficerJune 27, 2023
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Healthcare providers across the board should be ready to expect more medical coding audits. 

What’s coming down the pipeline shouldn’t catch anyone by surprise. I’m looking out across the CMS landscape and am seeing multiple warning signs that the agency is shifting more of their attention to coding practices and as a result, will likely be ready to pick up the pace on coding audits in the coming years. 

First off, are recent predictions that the Medicare Hospital Insurance Trust Fund will run out soon. Initially, the prediction was for around 2028 but recent updates shifted the looming date out three years to 2031 [1]. While this is a bit of a relief, it was met with an update from the Biden-Harris administration that reaffirmed its commitment to “protecting Medicare.” 

At the same time, the agency has been announcing new audit policies. This has ranged from increased attention on Medicare Advantage insurers who might be using upcoding to boost their profits, to off-site audits of nursing home schizophrenia diagnoses, designed to address excess use of antipsychotics. 

And they aren’t without support. The recent final rule that provided an overhaul of risk adjustment data validation (RADV) audits is getting expert support. A group of professors and PhD candidates published an article stating that the action taken on the audits should go further, speeding up the appeals process. 

So, what does this mean for providers? First, not to take the extension of the Hospital Insurance Trust Fund as a reason to relax – because it doesn’t appear that this administration is. Second, it means that coding accuracy is going to be a high-value area of focus for providers who want to avoid the weight and resource drain of future audits. This is something we regularly help our customers with, and I’ve seen many organizations make great improvements in getting ahead of medical coding audits simply by taking a proactive approach to coding accuracy.

Remember, that regardless of where you stand now, improving your chances of avoiding a medical coding audit always pays off.

[1] R. King, "Trustees predict Medicare hospital fund to run out in 2031, 3 years later than 2022 report," Questex LLC, 31 March 2023. Available: https://www.fiercehealthcare.com/payers/trustees-predict-medicare-hospital-fund-run-out-2031-three-years-later-2022-report.

Hemant Apte, Chief Executive Officer

Hemant Apte is the Founder and CEO of 3Gen Consulting, a leading healthcare revenue cycle management and technology company serving providers, ACOs, and health plans across the U.S. Since founding 3Gen in 2006, Hemant has guided the company’s evolution from a boutique consulting firm into a data-driven organization at the forefront of AI-powered RCM innovation. With decades of experience in U.S. healthcare operations, Hemant continues to provide thought leadership to clients navigating financial, compliance, and technology challenges in an increasingly value-based care environment.

Are You Ready for Medicare’s 2023 Medical Coding Audit Wave?

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FAQs

The FAQ section simplifies key information about 3Gen Consulting’s services, helping partners navigate our offerings, methodologies, and value.

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CMS is tightening oversight due to financial pressures and recent policy updates targeting coding accuracy and potential upcoding.

Medicare Advantage, risk adjustment, and clinical documentation tied to schizophrenia and antipsychotic use are key focus areas.

Regular internal audits, coding accuracy reviews, and proactive compliance education help reduce exposure.

While extended to 2031, the update signals continued scrutiny on coding and claims integrity to manage costs.

Inaccurate codes can lead to denials, takebacks, or penalties—hurting both revenue and compliance metrics.

3Gen combines audit analytics, coder education, and compliance expertise to help providers stay ahead of CMS scrutiny.