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The Pareto Effect on Two Clients’ HHS-RADV Performance

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Kevin Beltzman

Principal, Risk Adjustment Consulting

Kevin Beltzman is a seasoned healthcare leader, spending more than a decade in government programs driving strategic transformation across Medicare Advantage, Medicaid, and ACA programs. As Principal within Pareto Intelligence’s Consulting team, Kevin partners with clients to unlock performance gains through innovative, data-driven approaches to risk adjustment, quality improvement, and member engagement.

Kacey Holman

Director, Risk Adjustment Consulting

Kacey brings 20+ years of healthcare experience in HCC compliance, medical record auditing, coding education, and risk adjustment program operations. She focuses on providing guidance to health plans and value-based care entities across government programs including MA, PACE, ACA, and Medicaid.

Darlene Gallemore

Manager, Risk Adjustment Consulting

Darlene brings deep expertise in medical coding, HCC compliance, medical record auditing, and clinical documentation integrity. She works with health plans and value-based care entities to deliver strategic insights and improve risk adjustment accuracy across government programs.

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Recent ACA HHS-RADV results reinforce that audit performance directly affects financial outcomes. The following two ACA issuer case studies demonstrate the measurable value of partnering with Pareto Intelligence.

Executive Summary

CMS released the Benefit Year (BY) 2024 HHS Risk Adjustment Data Validation (RADV) results on Wednesday June 15, 2026, (Centers for Medicare & Medicaid Services, 2026) noting that BY2024 HHS-RADV error rates will be applied to 2024 plan liability risk scores and risk adjustment state transfers. That timing makes the latest results a critical planning signal for ACA issuers as financial exposure can move quickly when unsupported HCCs are not identified and/or properly validated before audit results are finalized.

The two client case studies below illustrate how material outcomes can differ when issuers use Pareto’s full suite of HHS-RADV support services compared with limited or no direct support.

Case Study 1: The Financial Difference of Full-Suite RADV Support

The clearest evidence comes from two client trajectories across benefit years 2022 through 2024. Both cases show that RADV outcomes can shift materially based on the level of Pareto support deployed at clients’ discretion during audit preparation, medical record coding review, chart chase analytics, financial projections, and overall strategic/operational consulting support.

As shown in Exhibit 1, in BY22 (no Pareto support), Client 1 experienced over a $300,000 unfavorable RADV impact, BY23 (no Pareto support) significantly ballooned to a several million-dollar unfavorable financial impact, and BY24 resulted in a neutral outcome after comprehensive Pareto support was implemented.

Exhibit 1.

Key Findings

As part of implementing Pareto’s recommended next-best-action plan:

  • Client 1 was able to increase their final RADV validation rate to ~94%
  • Additional medical records were retrieved that resulted in uncovering 48 additional net-new HCCs by implementing targeted RADV analytics and chart chase strategies.
  • RADV HCC failure rate decreased from ~20% to 7% YoY through additional coding and consultative partnership with Pareto.
  • Pareto found support for approximately 75% of HCCs initially flagged for deletion via IVA reviews.

Outcomes

After experiencing a significant eight figure financially unfavorable RADV impact in BY23, Client 1 achieved a neutral outcome in BY24 following implementation of a comprehensive RADV assessment and mitigation strategy.

Case Study 2: The Cost of Scaling Back Specialized RADV Support

Client 2 followed a different path. As shown in Exhibit 2, RADV financial exposure increased as Pareto’s RADV support was reduced and ultimately eliminated.

Exhibit 2.

Key Findings

  • Client 2 lacked a formal IVA rebuttal process prior to BY22, resulting in missed HCC validation opportunities.
  • Pareto implemented a structured rebuttal process that helped drive a net-neutral RADV payment impact for BY22.
  • As RADV support was scaled back and eventually removed for BY24, unfavorable financial impacts increased from under $200,000 in BY23 to over $800,000 in BY24.

Outcomes

While partnering with Pareto, Client 2 experienced a neutral RADV transfer payment impact for BY22. Thereafter, as a result of winding down Pareto’s RADV services, recent results indicate a trend of unfavorable RADV outcomes tracking towards a seven-figure unfavorable transfer payment.

The Bottom Line

For issuers seeking to reduce future RADV exposure, the key question is whether current processes are identifying and closing gaps before audit results become final. The difference between a significant liability and a neutral outcome often comes down to coding expertise, analytical prowess, chart retrieval effectiveness, and operational discipline.

Are you confident your organization is doing everything it can to improve RADV performance and reduce avoidable financial exposure?

If not, Pareto can help you identify gaps, prioritize high-impact opportunities, and build a more disciplined RADV operating model before the next audit cycle.

Request RADV Support

Source:

Centers for Medicare & Medicaid Services. (2026, July 15). Summary report of 2024 benefit year risk adjustment data validation (HHS-RADV) adjustments to risk adjustment state transfers. U.S. Department of Health and Human Services.
https://www.cms.gov/files/document/hhs-radv-adjustments-by24-transfers-report.pdf

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