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The Centers for Medicare and Medicaid Services is freezing enrollment in Elevance Health's Medicare Advantage-Prescription Drug Plans for alleged noncompliance with risk adjustment and data submission requirements.
John A. Scott, CMS director Medicare Parts C and D Oversight and Enforcement Group sent a letter, dated Feb. 27, sanctioning Elevance Health by suspending both enrollment of Medicare beneficiaries into Elevance plans and any communication to Medicare beneficiaries. The intermediate sanctions are being imposed on certain MA-Prescription Drug Plan contracts.
The freeze is effective March 31. CMS said it would remain in effect until it is satisfied that the deficiencies have been corrected and are not likely to recur.
However, if Elevance submits all data corrections for the potentially unverified diagnosis codes disclosed in its correspondence from Nov. 13, 2018, through Oct. 10, 2025, and does this through CMS's official electronic systems, CMS would not effectuate the sanctions, CMS said. Elevance must do this by March 30, and its attestation must be submitted by Elevance's CEO or most senior official.
Elevance said by statement, "We are currently reviewing the letter received from the Centers for Medicare & Medicaid Services (CMS) that relates to past periods. 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. 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."
If Elevance does not meet this deadline, the sanctions would go into effect March 31, and Elevance would be required to submit a detailed corrective action plan.
Elevance has until March 10 to provide a written rebuttal. It has until March 16 to request a hearing.
WHY THIS MATTERS
Elevance has acknowledged in its correspondence to CMS that it conducted retrospective medical record reviews and identified diagnosis codes that it has been unable to verify by medical record documentation, CMS said.
This means that certain provider-generated diagnosis codes Elevance previously submitted for risk adjustment purposes were not supported by the underlying medical records, CMS said.
Despite having knowledge that these diagnosis codes were unverified and did not conform to the ICD coding guidelines, Elevance failed to report and return the associated overpayments within 60 days of identification.
Elevance also did not submit the data through the required systems, CMS said.
Instead, Elevance repeatedly provided the information via encrypted external USB flash drives, a method CMS said it has explicitly rejected.
"Elevance's conduct demonstrates a pattern of knowing noncompliance that has persisted for over seven years despite repeated clear directives from CMS," the letter said. "The unsupported diagnosis codes span multiple payment years (PY 2016–2024) and affect numerous contracts and beneficiaries. The potential financial impact of these unsupported diagnoses is substantial and ongoing."
THE LARGER TREND
Unsupported diagnosis codes increase capitated payments. Accurate risk adjustment data are central to CMS's payment determinations, CMS said.
Since Nov. 18, 2018, Elevance has failed to submit data corrections for diagnosis codes it identified as unsupported by Medicare record documentation, CMS said in the letter to Aimee Dailey, president Medicare Programs for Elevance in Norfolk, Virginia. Elevance continued this practice as recently as Oct. 10, 2025, CMS said.
CMS found:
Elevance failed to delete diagnosis codes that are not documented in its medical records.
Elevance failed to report and return overpayments no later than 60 days after the date on which the overpayment was identified in accordance with CMS requirements.
Elevance failed to submit risk adjustment data electronically in accordance with CMS Instructions.
Elevance inaccurately certified the accuracy, completeness and truthfulness of relevant data that CMS requests to determine payment.
Email the writer: SMorse@himss.org