5 Biggest Medicare Advantage Compliance Challenges in 2026
Sevana Health Team
May 16, 2026
The 2026 CMS Program Audit memo reset the rules. Scoring is gone, ICAR/ORCA classifications are retired, the new CAR/Observation/IDS framework is in place, and CPE evaluation has shifted to a collaborative model grounded in oversight data. Below are the five challenges Medicare Advantage compliance teams are working through right now, and how each maps to the new audit reality.
In this article
1. The new finding framework changes what "passing" means
The November 2025 CMS Program Audit memo retired audit scoring and the ICAR/ORCA classifications that compliance teams had built workflows around since 2012. Findings now fall into three classes:
CAR
Corrective Action Required. Noncompliance that needs documented correction to strengthen internal controls or resolve enrollee impact.
Observation
Noncompliance that does not require a corrective action plan, but the sponsor should monitor to ensure it does not recur.
IDS
Invalid Data Submission. Cited when a sponsor cannot produce an accurate or complete universe after three submission attempts.
The practical implication is that IDS becomes the standalone fail state for universe data. A plan can pass the substantive parts of an audit and still walk away with an IDS finding on the record if the underlying universe files were inaccurate or incomplete. For a deeper breakdown of what triggers IDS and how the three-attempts rule plays out, see our post on Invalid Data Submission in 2026.
Where the platform fits
The CMS Universe Scrubber validates ODAG, CDAG, FA, SNPCC, and CPE files against 1,600+ rules before submission, so data quality issues are caught and fixed before they ever reach an auditor. The Compliance Work Plan then tracks any resulting CARs through evidenced resolution.
2. Collaborating on Compliance raises the CPE bar
Under the old model, Compliance Program Effectiveness reviews were a punitive exercise: findings, three-business-day corrective action plans, back-and-forth on remediation. The 2026 memo replaces that with Collaborating on Compliance, a discussion-based approach grounded in the sponsor's COA universe data.
On paper this is friendlier. In practice it raises the bar: auditors now expect to see real oversight evidence and a plausible story about how compliance issues are identified, escalated, and resolved. A thin COA universe makes for a short, defensive conversation. A well-populated COA universe with documented oversight activities makes for a productive one.
We covered the practical implications in detail in our piece on the CPE COA universe under Collaborating on Compliance.
Where the platform fits
Compliance Metrics captures monthly and quarterly oversight activities across every H-contract, assigned to the business owners who actually run them. The Compliance Work Plan tracks corrective actions through evidenced resolution. Together they produce the documented oversight story the new CPE model expects.
3. Memo-to-policy traceability is the new expectation
The pace of HPMS memos and CMS guidance updates has not slowed, and auditors increasingly expect to see a clear chain from each memo to the affected policies and procedures to the operational implementation. Implicit knowledge that "we updated the right policy" is not enough; the chain has to be documented.
Manual cross-referencing of new memos against a policy library is the bottleneck most compliance teams hit first. With hundreds of active P&Ps, missed connections happen, and they are exactly the kind of issue that shows up later as a Condition or CAR. We wrote about the failure mode in detail in why manual CMS memo to policy matching breaks down at scale.
Where the platform fits
AI Policy Intelligence cross-references new CMS memos against your P&P library and ranks affected policies by impact. The Policies and Procedures module tracks revisions and approvals, and Guidance Distribution captures personnel acknowledgments. The full chain from memo to implementation is documented as a byproduct of normal work.
4. Delegated entity oversight requires real measurement
Most Medicare Advantage and Part D plans rely on third-party administrators and pharmacy benefit managers for at least some of the universe data CMS will eventually review. Per 42 CFR, the plan remains accountable for that data even when the production work is delegated. "We trust our TPA" is not an oversight program.
The challenge in 2026 is moving from contractual oversight (we have an SLA) to measured oversight (we track error rates, iteration counts, and recurring failure modes by entity, month over month). Plans that only look at whether a file eventually passed miss the underlying trend: a TPA that needs four resubmissions every month is declining in performance, even if the final file passes. We laid out a measurement framework in measuring TPA performance with universe file data.
Where the platform fits
The CMS Universe Scrubber tracks per-entity error rates and resubmission patterns over time, so compliance teams can have data-backed conversations with delegated entities instead of relying on monthly attestations.
5. Multi-protocol universe quality at audit-ready scale
ODAG, CDAG, FA, SNPCC, and CPE each have their own universe tables, field requirements, timeliness rules, and common failure modes. Compliance teams that handle one or two protocols manually find that approach does not scale to all five, especially when the three-attempts-then-IDS clock starts running.
The protocol-specific complexity is real:
- • ODAG covers six tables across organization determinations, reconsiderations, payments, effectuations, grievances, and AIP
- • CDAG mirrors ODAG for Part D coverage determinations with its own field nuances
- • FA formulary administration requires specific data on coverage and exclusions
- • SNPCC applies to special needs plans with care coordination requirements
- • CPE COA captures the oversight activities that now drive Collaborating on Compliance discussions
Each protocol has hundreds of validation rules. Across all five, the rule count crosses 1,600. Manual checks at that scale miss errors that automated row-by-row validation catches in seconds.
Where the platform fits
The CMS Universe Scrubber validates all five protocols against the current CMS specifications and surfaces errors row by row, so compliance teams catch issues in the first submission attempt rather than the third.
What this means for your team
The 2026 framework rewards plans that treat compliance as a continuous, measured operation rather than an audit-prep sprint. The five challenges above are not separate problems; they are facets of the same shift. Real oversight evidence, traceable memo-to-policy chains, measured delegated entity performance, and high-quality universe data all draw from the same operational discipline.
For most plans the question is not whether to invest in this capability but whether the existing toolset (spreadsheets, shared drives, email threads) can scale to what the new audit reality requires. The plans that succeed in 2026 will be the ones that turned their oversight evidence into a real artifact, not a story they assemble during fieldwork week.