Will CMS RADV audit results for PY2018 result in material Medicare clawbacks (>$50M) for Molina by Q3 2026?
Current Prediction
Why This Question Matters
RADV audit findings represent a binary unknown — either clawbacks are immaterial (<$50M) or they add material financial stress on top of existing margin compression. The PY2018 audit scope is unknown to outside analysts. If findings are material (>$50M), it compounds regulatory pressure on the Medicare segment (14% of revenue) alongside Medicaid and Marketplace headwinds. If immaterial, one layer of regulatory risk can be de-prioritized.
Prediction Distribution
Individual Predictions(9 runs)
Historical RADV error rates (3-8%) applied to $5.4B Medicare segment suggest potential exposure, but dual barriers (timing + threshold) significantly reduce YES probability.
Escalating CMS MA oversight and 2023 RADV rule enabling broader clawbacks increase risk, but Q3 2026 deadline creates timing constraint.
Unknown audit scope and lack of PY2018 disclosure details create uncertainty. Base rate for >$50M clawbacks appears low given materiality threshold.
November 2024 audit initiation aligns with mid-2026 release, but CMS delays are common. $50M represents ~0.9% of Medicare revenue, achievable at upper error rate range.
Cumulative pressure context suggests Molina under scrutiny, but timing barrier dominates as primary risk factor for NO resolution.
Recent $40M TX Medicaid settlement demonstrates regulatory exposure. PY2018 RADV could be proportionally larger given Medicare segment size and CMS escalation.
Conjunction of two independent conditions (release by Q3 2026 AND >$50M) significantly lowers probability. No disclosed PY2018 specific concerns.
Even at 8% error rate on $5.4B segment, threshold is achievable, but CMS audit timelines frequently slip beyond expected release windows.
Committee classified as MEDIUM priority binary. Finalized 2023 RADV rule enables broader clawbacks, increasing risk relative to pre-2023 base rates.
Resolution Criteria
Resolves YES if by September 30, 2026, Molina Healthcare discloses in 10-Q, 8-K filings, or earnings materials, or CMS publicly releases RADV audit results indicating Payment Year 2018 Medicare Advantage payment clawback liability exceeding $50 million for Molina. Resolves NO if no material findings are disclosed, clawback is less than $50M, or audit results are not released by September 30, 2026. Materiality threshold of $50M aligns with 8-K disclosure requirements.
Resolution Source
Molina Healthcare 10-Q, 8-K filings; CMS.gov RADV audit results publications; earnings call transcripts
Source Trigger
RADV audit findings — PY2018 audits initiated; mid-2026 CMS release expected; potential Medicare clawbacks of unknown magnitude
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