The Centers for Medicare & Medicaid Services (CMS) has notified Elevance Health of its intent to impose sanctions suspending new beneficiary enrollments and certain communications in the company’s Medicare Advantage-Prescription Drug (MA-PD) plans, effective March 31, 2026. The action stems from alleged longstanding noncompliance with risk adjustment data submission requirements for services before April 3, 2023. Elevance shares dropped over 3% following the disclosure, though existing members’ benefits remain unaffected as the company works to resolve the issues with regulators.
Elevance Health Faces Enrollment Suspension in Key Medicare Plans Over Risk Adjustment Data Issues
The Centers for Medicare & Medicaid Services (CMS) has taken a significant enforcement step against one of the nation’s largest Medicare Advantage operators. On February 27, 2026, CMS formally notified Elevance Health, Inc.—the parent company of plans formerly branded under Anthem—of its determination to apply intermediate sanctions. These measures will halt new enrollments of Medicare beneficiaries into Elevance’s MA-PD plans and restrict specific outbound communications to potential enrollees, with the sanctions scheduled to begin on March 31, 2026.
The core of the regulatory action centers on persistent failures in Elevance’s handling of risk adjustment data submissions. Risk adjustment is a foundational mechanism in Medicare Advantage, where CMS adjusts payments to plans based on the health status of enrollees. Plans must submit accurate diagnosis codes supported by medical record documentation to justify higher payments for sicker beneficiaries. According to CMS, Elevance has not submitted required data corrections for unsupported diagnosis codes identified since November 13, 2018, through the agency’s electronic systems. This noncompliance applies specifically to dates of service prior to April 3, 2023.
Elevance revised its submission practices in April 2023 following updated CMS guidance on risk adjustment protocols. Despite these changes, the agency views the earlier issues as substantial and ongoing, warranting enforcement. The sanctions do not affect current MA-PD enrollees, who will continue to receive their full benefits and coverage without interruption. Existing members can maintain their plans, renew coverage, or make standard changes during enrollment periods.
In its public disclosure via an SEC filing, Elevance emphasized cooperation with CMS. The company stated it is actively engaging with regulators to address the concerns raised in the notice. If Elevance successfully submits all necessary data corrections and provides required attestations demonstrating resolution, CMS could lift or modify the sanctions before the March 31 effective date. The agency has indicated it will issue separate detailed instructions on the scope of the enrollment and marketing suspensions.
This development arrives amid broader scrutiny of Medicare Advantage operations. CMS has intensified oversight in recent years to ensure accurate risk coding, combat overpayments tied to unsupported diagnoses, and protect program integrity. Risk adjustment data inaccuracies have been a recurring focus, with audits revealing patterns across multiple large insurers. For Elevance, which serves millions through its Medicare Advantage offerings, the sanctions represent a direct hit to growth potential in a segment where new enrollments drive revenue expansion.
Market reaction was swift. Elevance Health shares (NYSE: ELV) declined more than 3% in trading following the announcement, reflecting investor concerns over potential impacts on membership growth and operational costs tied to remediation efforts. Medicare Advantage remains a critical business line for Elevance, contributing significantly to overall premiums and membership totals among major payers.
The sanctions highlight the high stakes of compliance in the Medicare Advantage space. Plans must maintain rigorous processes for data validation, medical record reviews, and timely submissions to avoid such penalties. Noncompliance can lead to financial recoveries, civil monetary penalties in other cases, or more severe actions like contract termination if issues persist unresolved.
Elevance has committed to collaborative resolution, underscoring its dedication to meeting CMS standards. The outcome will depend on the speed and thoroughness of corrective actions. Should the company remediate effectively, the suspension could be averted or shortened, preserving access for new beneficiaries seeking coverage through its MA-PD offerings.
For seniors and beneficiaries considering Medicare Advantage options, this serves as a reminder of the regulatory environment surrounding these plans. While disruptions to new enrollments could limit choices in certain markets if the sanctions take full effect, the broader program continues to offer diverse coverage alternatives.
Disclaimer: This is a news report based on publicly available information and regulatory disclosures. It is not financial, investment, or legal advice. Readers should consult official CMS resources or professional advisors for personalized guidance.
