Elevance Health faces a potential suspension of enrollment in its Medicare Advantage plans starting March 31, according to a notice issued by the Centers for Medicare & Medicaid Services (CMS). The action, announced Monday, stems from Elevance’s failure to provide required data to federal regulators over a period of seven years.
The CMS sanction does not impact the approximately 1.9 million individuals currently enrolled in Elevance Medicare Advantage plans for this year. However, the suspension would prevent the company from attracting new members during a critical period leading up to Medicare’s annual enrollment window in October. CMS indicated that Elevance could avert the suspension if it takes corrective actions this month to address the data submission issues.
The news sent Elevance’s stock price tumbling more than 8% on Monday, signaling investor concern over the potential financial impact. The severity of the sanction is unusual, suggesting a significant breakdown in compliance, according to industry observers.
This action follows a recent legal defeat for Elevance. In August 2025, a federal judge in Texas dismissed the company’s lawsuit challenging the government’s Medicare Advantage quality ratings, a decision that could have cost Elevance $375 million in potential bonus revenue. U.S. District Judge Mark T. Pittman, appointed by President Trump, criticized Elevance’s arguments as flawed and affirmed that CMS had correctly applied the law in its ratings calculations. The judge reportedly stated that Elevance was “ignoring basic math.”
The lawsuit was part of a broader effort by Medicare Advantage insurers to contest CMS’s ratings methodology, seeking to recover billions of dollars in revenue tied to those ratings. The industry has aggressively pursued legal challenges in recent years, but Elevance’s loss represents a significant setback. Bob Herman, who covers health insurance and government programs, reported on the August 2025 ruling.
The CMS has yet to comment on whether the data submission issues are related to the quality rating dispute. As of Tuesday, March 3, 2026, the agency has not indicated whether it will reconsider its position if Elevance fails to meet the March deadline for corrective action.
