CMS and the Acceleration of Audits

On April 28, 2025, The Centers for Medicare & Medicaid Services (CMS) made policy changes to F641-Accuracy of Assessments as part of their ongoing efforts to prevent fraud, waste and abuse within the Medicare Trust Fund. The biggest impact the policy change brings for long-term care providers is that surveyors are now required to report patterns of inaccurate Minimum Data Set (MDS) assessments, with the definition of a “pattern” being three or more instances during the period under review. Depending on the scope of the citation, it could be categorized as isolated or widespread, and cases are referred to the Office of Inspector General (OIG), the State Board of Nursing or both—potentially putting clinical staff and the facility in jeopardy.

In May 2025, CMS announced plans to expand its audit efforts by focusing on Medicare Advantage contracts, which it estimates has cost between $17 billion to $43 billion per year in overpayments that were not supported by medical records.^[1] By early 2026 CMS expects to complete a large backlog of audits dating from payment year 2018.

To mitigate citation risks, prioritize proper clinical documentation

Both Medicaid and Medicare rely on MDS data to calculate reimbursement rates. Insufficient medical record documentation can lead to inaccurate MDS coding, which can prompt unwanted Additional Documentation Requests (ADRs). A high volume of ADRs requires more operational support to facilitate the requests, and providers may face further audits, reduced reimbursements, reputational risk, financial penalties and even federal investigations. The only way providers can prevent this downward spiral of events is to ensure that a patient’s medical documentation is thorough and any diagnosis is supported by physician records. In other words, the MDS assessment must replicate what is evident in the medical record.

What steps can your facility take to avoid MDS noncompliance?

• Enrich staff training on documentation best practices, especially concerning new diagnoses
• Provide nurses sufficient time every shift to complete documentation efficiently
• Support MDS coordinators with communication, training and technological resources
• Even if there is a heavy MDS workload, make each one a priority
• Any auto-generated data shall be reviewed and certified as accurate
• Focus on providing quality assessments, avoiding lengthy reports that obscure a patient’s true status
• Use the appropriate look-back period, noting that different MDS items have different observation periods
• Bill only after all required documentation is finalized
• Maintain updated policies and workflows that reflect current regulatory standards
• Conduct internal audits, focusing on high-risk areas
• Ensure staff understands the potential penalties associated with falsification
• Lean on external sources to fill knowledge or administrative gaps

Executive Oversight

MDS assessments are completed at the facility level—but they impact the entire organization. The new F641 standards and aggressive CMS audit strategies demand vigilance from corporate clinical leaders, who should be concerned with cost containment and quality measures. Issues with inaccurate MDS assessments and documentation practices should not be taken lightly, and leadership must take an active role in ensuring compliance.

At a minimum, executives should be privy to ADR reporting that tracks the number of requests received, reason codes, request types and the financial amount at risk. This is especially important in regard to post payment claims, which can be demanded back (in full or in part) even if already reimbursed. To avoid further financial strain, leadership should utilize reporting to identify problematic patterns such as upcoding or downcoding and remedy issues before consequences escalate.

Additionally, MDS coordinators, the interdisciplinary team (IDT) team and clinical staff need to be recognized for their contributions, as they are the ones who are responsible for generating the star ratings for your facility. It is their competence that ensures timely and accurate reimbursements, so they should be supported and sufficiently staffed to meet workload demands.

Safeguarding Your Financial Integrity

Anyone that is coordinating and completing MDS assessments plays an important role that directly impacts an organization’s bottom line. The MDS Resident Assessment Instrument (RAI) manual spans over 1,000 pages, and regulations are constantly evolving, making inadvertent mistakes likely. MDS teams need ongoing education and access to resources when they need validation or clarification.

For more than 25 years, Richter’s Clinical Consulting team has supported providers in every capacity of their operation. As your partner, we help resolve clinical documentation and reimbursement challenges that are costing you vital revenue. We offer:

• Independent MDS audits to enhance compliance and reduce your risk exposure
• Proactive approach in identifying systemic issues and inefficiencies that can trigger ADRs
• Comprehensive training for your IDT and MDS coordinators, who play crucial roles in the reporting of patient acuity
• EHR-MDS integration and optimization
• Executive leadership support

 To learn more about our comprehensive clinical solutions, contact us here or call us at 866.806.0799.

[1] https://www.cms.gov/newsroom/press-releases/cms-rolls-out-aggressive-strategy-enhance-and-accelerate-medicare-advantage-audits