March 2 (Reuters) – The Centers for Medicare & Medicaid Services has notified Elevance Health it plans to impose sanctions that would suspend enrollment in the health insurer’s Medicare Advantage prescription drug plans starting March 31, 2026, a filing showed on Monday. Shares of the company fell more than 3% in premarket trading. CMS said […]
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US Medicare agency intends to suspend enrollment in Elevance’s prescription drug plans
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March 2 (Reuters) – The Centers for Medicare & Medicaid Services has notified Elevance Health it plans to impose sanctions that would suspend enrollment in the health insurer’s Medicare Advantage prescription drug plans starting March 31, 2026, a filing showed on Monday.
Shares of the company fell more than 3% in premarket trading.
CMS said the proposed sanctions relate to Elevance’s alleged noncompliance with certain risk adjustment data submission requirements related to Medicare Advantage. In the risk adjustment model, insurers are paid more when their patients are sicker.
The agency adjusts the payment amounts based on health status and demographic factors, and so certain diagnosis codes can increase the payment amount to a health insurer.
Since November 13, 2018, Elevance has failed to submit data corrections for diagnosis codes it identified as unsupported by medical record documentation through CMS’s required electronic systems, according to the notice dated February 27.
Instead, Elevance has repeatedly provided this information via encrypted external USB flash drives, a method that CMS has explicitly rejected.
Despite repeated clear directives from CMS that encrypted files do not satisfy regulatory obligations, the agency said Elevance continued this practice as recently as October 10, 2025.
Restricting new enrollment can further pressure membership and revenue growth for Elevance, which had previously flagged a decline in revenue for 2026.
The action will take effect unless the agency determines the issues identified have been satisfactorily addressed. Elevance would need to provide a written rebuttal by March 10, 2026.
CMS is also imposing communications suspensions until Elevance corrects these deficiencies and demonstrates they will not recur.
The health insurer said it had revised its practices in April 2023 and the suspension does not impact the company’s current members enrolled in the plans that cover prescription drug costs for older adults.
(Reporting by Sriparna Roy and Sahil Pandey in Bengaluru; Editing by Krishna Chandra Eluri)