UPDATED: May 29 at 5:45 p.m. ET
Elevance Health has earned a reprieve from potential federal sanctions on its Medicare Advantage plans.
The Centers for Medicare & Medicaid Services sent a letter (PDF) to the company Friday, saying that it has completed key steps to remedy the agency's concerns. CMS was set to suspend enrollment in Elevance's MA plans on March 31 if the insurer did not comply.
In March, CMS said that the company had consistently failed to use the agency's official channels to correct data on diagnostic codes found to be unsupported by medical records. Instead, Elevance Health would submit the corrected, encrypted data using a USB drive, a practice that it carried through October 2025, CMS said.
In Friday's letter, CMS said Elevance has completed initial data submissions through the designated channels, and sent a wire transfer for overpayments based on "all auditable estimates" in the case. How much money that amounts to was not disclosed.
But despite the good news, the company is not out of the water yet. CMS said it must complete further steps by June 30 to avoid sanctions, as well as tie up any loose ends from previous steps in the process by July 31.
Sanctions would be implemented on July 1 if new steps are not met, or on Aug. 1 if these incomplete processes are not resolved, CMS said.
An Elevance Health spokesperson told Fierce Healthcare that the company "continues to engage in constructive dialogue with the Centers for Medicare & Medicaid Services."
"We remain optimistic that a resolution can be reached and value our longstanding relationship with CMS," the spokesperson said.
PUBLISHED: March 2 at 11:50 a.m. ET
The Trump administration has threatened to sanction Elevance Health's Medicare Advantage plans if the insurer does not address concerns around compliance with requirements for submitting risk adjustment data.
The Centers for Medicare & Medicaid Services (CMS) sent a notice (PDF) to the company last week, saying that the sanctions will take effect on March 31 if it does not comply, suspending its ability to enroll people in its MA plans. CMS said the sanctions will "remain in effect until CMS is satisfied that the deficiencies upon which the determination was based have been corrected and are not likely to recur."
Elevance Health disclosed the notice in a filing with the Securities and Exchange Commission (SEC) posted on Monday. It said that the potential suspension would not impact individuals currently enrolled in its Medicare Advantage plans or the benefits they receive.
In a statement to Fierce Healthcare, a spokesperson said that the company is currently reviewing the notice.
"We stand firmly behind the compliance and integrity of our Medicare Advantage program, which is supported by rigorous oversight, comprehensive monitoring and established governance processes," the spokesperson said. "We value our longstanding relationship with CMS and will continue to engage constructively and transparently."
"Our focus remains on delivering high-quality coverage and service to our Medicare Advantage members," they said.
In the notice, CMS alleges that the behavior dates back to November 2018 and that Elevance Health has consistently failed to submit corrected data for diagnostic codes determined to be unsupported by medical records using CMS' designated channels.
Instead, the agency said, the company would provide encrypted data via a USB drive, a method it has "explicitly rejected." CMS said that Elevance Health has engaged in this approach as recently as October 2025.
"This conduct violates multiple statutory and regulatory requirements, including the obligation to submit accurate risk adjustment data through the required electronic systems, report and return overpayments within 60 days of identification, and certify the accuracy of data submissions," CMS said in the notice.
The agency said it will send further details on marketing and enrollment suspensions in further communications.
In its SEC filing, Elevance Health said that the alleged noncompliance is related to claims predating April 3, 2023. That month, the company revised its practices following further guidance from the feds.
"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," the company wrote.
Shares in Elevance Health fell Monday following the news, with its share price trading down by almost 9% at 1:30 p.m. ET.