Elevance Health Inc. (NYSE:ELV) stock is trading lower on Monday after the Centers for Medicare & Medicaid Services (CMS) froze the insurer’s Medicare Advantage enrollment.
CMS Freezes Medicare Advantage Enrollment
The agency on Friday notified Eevance Health of its intent to impose intermediate sanctions suspending enrollment of Medicare beneficiaries into the company’s Medicare Advantage-Prescription Drug (MA-PD) plans and suspending certain communication activities to Medicare beneficiaries.
The sanctions are scheduled to take effect on March 31, 2026, unless CMS determines that the issues identified have been satisfactorily addressed.
The suspension does not impact the company’s current MA-PD members’ benefits or plans.
Regulatory Concerns Over Risk Adjustment Data Submissions
In an SEC filing on Friday, the CMS indicated that the proposed sanctions relate to alleged noncompliance by the company with certain Medicare Advantage risk adjustment data submission requirements for dates of service before April 3, 2023.
Elevance Health revised its practices in April 2023 following the issuance of additional regulatory guidance.
The company is engaging with CMS regarding the matters raised in the notice and is committed to working cooperatively with CMS to address its stated concerns.
As per the CMS notice, since November 2018, the company has not corrected unsupported diagnosis codes through CMS-mandated electronic systems. Instead, Elevance has repeatedly submitted the data via encrypted external USB drives — a method CMS has explicitly rejected.
Despite repeated clear directives, Elevance continued this practice as recently as October 10, 2025.
Fourth-Quarter Results And 2026 Outlook
In January, Elevance Health reported mixed fourth-quarter 2025 earnings and bleak fiscal 2026 guidance.
The company reported fourth-quarter 2025 revenues of $49.3 billion, up 10% year over year, below the consensus of $49.82 billion. Operating revenue was $197.6 billion in 2025, up 13%.
Elevance Health expects fiscal 2026 adjusted earnings to be at least $25.50 per share compared to the Wall Street estimate of $26.90.
The insurance company forecasts 2026 sales to decline in mid-single digits, due to lower premiums.
CMS Payment Policy Proposals Add Further Pressure
In January, the CMS outlined proposed methodological and payment policy updates for Medicare Advantage that point to modest payment growth in 2027 while emphasizing program sustainability, accuracy, and administrative simplicity.
If finalized, the proposals would result in a net average year-over-year payment increase of mere 0.09%, translating to more than $700 million in additional payments to Medicare Advantage plans, well below the expected rate of 4%-6%.
ELV Price Action: Elevance Health shares were down 7.23% at $296.88 at the time of publication on Monday, according to Benzinga Pro data.
Photo by Jonathan Weiss via Shutterstock
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