CMS Freezes Elevance Health MA Enrollment Effective March 31 Over Data Violations
CMS froze Elevance Health’s enrollment in Medicare Advantage-Prescription Drug plans effective March 31 for risk-adjustment data noncompliance involving USB drive submissions. Elevance posted Q4 2025 revenues of $49.3 billion (up 10% year-over-year) below consensus and cut fiscal 2026 EPS guidance to at least $25.50, citing lower sales.
1. CMS Enrollment Freeze and Scope
CMS has imposed intermediate sanctions on Elevance Health suspending enrollment of new Medicare Advantage-Prescription Drug beneficiaries and restricting communications to Medicare participants starting March 31, 2026; existing MA-PD members will retain their benefits unaffected by the freeze.
2. Data Submission Noncompliance
The sanctions stem from Elevance’s failure to correct unsupported diagnosis codes via mandated electronic systems for dates of service before April 3, 2023; the company repeatedly submitted risk-adjustment data on encrypted USB drives, contrary to CMS requirements.
3. Financial Results and Guidance Revision
For Q4 2025, Elevance reported revenues of $49.3 billion, a 10% year-over-year increase but below consensus, and forecasted fiscal 2026 adjusted EPS of at least $25.50 versus $26.90 expected, anticipating mid-single-digit sales declines.
4. Regulatory Pressure from Payment Policy Proposals
CMS’s proposed Medicare Advantage payment rules for 2027 aim for only a 0.09% net increase, adding pressure on plan revenues and emphasizing program accuracy, sustainability, and simplicity in risk-adjustment processes.