Key Points
- V28 is no longer phased in. As of 2026, all risk scores and revenue are calculated entirely under the new model, with no V24 cushion left.
- Updated normalization factors and HCC coefficients quietly change which conditions still carry value, so last year’s coding priorities may now be wrong.
- RADV audits expanded from ~60 contracts a year to every eligible MA contract, every year, with CMS clearing a backlog covering payment years 2018–2024.
- These shifts together mean plans need an operating model rebuild: analytics tuned to V28, full-chart coverage, and audit-ready documentation from day one, which is what Sutherland’s Risk SigmaIQ is built for.
Three things changed in Medicare Advantage risk adjustment at the same time: the model went fully live, the coefficients moved, and the auditor started showing up every year. The industry is still talking through what it means — the V28 transition, the new normalization factors, and revised Hierarchical Condition Categories (HCC) coefficients are the headline topics at every risk adjustment roundtable this season. For the first time, the model that pays your plan in 2026 is not the model your operations were designed for.
Change One: V28 is No Longer a Phase-in
CMS introduced V28 in 2024 and phased it over three years: one-third in 2024, two-thirds in 2025, and fully in 2026. That distinction matters. Through the blend years, a health plan could lean on V24 scoring to cushion the impact. In 2026 the cushion is gone. Risk scores, and the revenue attached to them, are calculated entirely under V28.
Mastering the V28 transition is not a documentation refresh. The model reshaped which conditions carry value, constrained several high-volume families so severity depth pays less, and remapped codes so that historical crosswalks quietly mislead. A program tuned to V24 does not just run slightly behind under V28. It systematically targets the wrong opportunities.
Change Two: Normalization and Coefficients Moved the Goalposts
Underneath the model, the math shifted too. Updated normalization factors and revised HCC coefficients changed the dollar value of capturing any given condition. Centers for Medicare & Medicaid Services (CMS) projected an average RAF decline of about 3.12% across the transition. Optimizing for the new normalization factors and adapting to the updated coefficients is precisely the work that separates plans that hold revenue from plans that watch it erode.
The practical effect is that last year’s priorities are wrong this year. The chart that was worth chasing in 2025 may not be in 2026, and a condition that looked marginal may now be among the few that still move the score. Without analytics calibrated to V28 as it actually pays, teams spend effort where value used to be, not where it is.
Normalization deserves particular attention because it is easy to overlook. A normalization factor adjusts the average risk score across the program, which means it changes the dollars attached to a fixed amount of coding work even when nothing about your members or your documentation has changed. A plan can run the exact same program two years in a row and see different revenue purely because the denominator moved. Treating normalization as a back-office actuarial detail, rather than an input to operational priorities, is one of the quieter ways revenue slips.
Change Three: Radv Stopped Being a Lottery
Risk Adjustment Data Validation (RADV) is a rigorous audit process used by CMS to ensure that diagnosis codes submitted by Medicare Advantage (MA) plans are fully supported by underlying clinical documentation.
While the model tightened, so did enforcement. CMS moved from auditing roughly 60 contracts a year to auditing every eligible Medicare Advantage contract, every year, and set out to clear the backlog of audits for payment years 2018 through 2024 (CMS). The exposure is significant: CMS estimates MA overpayments at about $17 billion annually, and MedPAC suggests the figure could reach $43 billion (CMS, MedPAC).
When audits were rare, weakly supported HCCs were a remote risk you could discount. When every contract is reviewed every year, that same risk becomes a budgeted cost. Maintaining compliance while safeguarding revenue is no longer a defensive afterthought. It is the core of the program.
There is also a timing trap worth naming. Audits for prior payment years are being worked through now, which means decisions your program made several years ago are being graded against today’s enforcement posture. You cannot retroactively improve documentation that was never captured. The only lever available is to make every submission defensible from the moment it is made, so that whatever year eventually comes under review, the answer is already in the file.
Three Changes, One Implication
Read separately, each change is a project. Read together, they point to a single conclusion: the operating model has to change, not just the coding guidance. You need analytics that reflect V28 economics, coverage that finds the conditions that still carry value, and an audit trail strong enough to defend every submission the year it is made.
That is the shift Sutherland’s Healthcare Risk Adjustment Solution for Payers was built for: a program calibrated to V28, reading every chart, with RADV readiness designed into each step rather than bolted on afterward.
The plans that struggle in 2026 are not the ones that lacked talent or effort. They are the ones that updated their coding guidance and assumed the rest of the program could stay the same. When three structural forces move at once, incremental tuning cannot keep pace. The plans that hold their ground treat 2026 as the year to rebuild the operating model around the rules as they now are, not as they were during the comfortable years of a stable V24.
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If the rules have changed this much, the obvious question is what a well-run program now looks like. Next, we break down how leading plans are actually responding.
