Dive Brief:
- Elevance avoided steep sanctions against its Medicare Advantage plans that were set to kick in on Wednesday, after the CMS granted the insurer an extension to make up for incorrect risk adjustment data reporting stretching back years.
- Earlier this year, the CMS notified Elevance that it planned to prevent the insurer’s MA plans from enrolling new members, along with other sanctions, starting on March 31 after finding that Elevance failed to comply with federal data submission requirements. Elevance asked regulators for more time to comply, and the CMS granted the company’s request in mid-March, according to a disclosure from Elevance.
- Elevance now has until May 30 to correct its data reporting before sanctions kick in. The CMS also exempted several of Elevance’s MA plans that weren’t impacted by the noncompliance from the potential penalties.
Dive Insight:
Regulators informed Elevance of the impending sanctions in February, alleging that the insurer failed to submit data backing up its members’ risk adjustment scores through the CMS’ electronic systems for the past seven years.
Elevance’s actions were problematic because they made it harder for regulators to double check risk scores — a key measure of Medicare beneficiaries’ risk statuses that impact how much a plan gets paid for their care — and claw back any overpayments, regulators said.
The threatened sanctions were severe. Along with preventing Elevance’s MA plans from enrolling new members, the CMS also planned to suspend certain communications to Medicare beneficiaries.
According to analysts, the penalties would ding Elevance’s reputation and standing among brokers, likely curtailing membership growth in the future. That’s not a major threat at the moment, given Elevance already aimed to trim its MA membership this year to bolster flagging margins in the privatized Medicare program.
But it could make it harder for Elevance to chase growth in the future after margins stabilize, analysts said.
Regulators originally gave Elevance until the end of March to submit data corrections for potentially unverified diagnosis codes through the CMS’ official systems, and to make sure diagnosis codes that aren’t supported by medical records are properly corrected moving forward.
But after a “productive dialogue” with the CMS, the agency granted Elevance’s request to extend the date that sanctions kick in, Elevance said in a press release on March 18.
Pushing back the deadline will give Elevance and the CMS more time for technical discussions and for Elevance to submit the required data corrections through the CMS’ official electronic systems, a spokesperson for the agency said.
Elevance now has until May 29 to comply. Sanctions will kick in the following day if the company doesn’t meet the CMS’ requirements, the CMS spokesperson said.
“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. This matter does not impact how we serve members today or affect member coverage, benefits, or care. Our focus remains on delivering high-quality coverage and service to our Medicare Advantage members,” Elevance said in a press release on March 18.
