Elevance estimates it will take $935m to avoid sanctions

Is $935 million enough to send a message? We may soon find out.

Elevance’s most recent quarterly report estimated it will cost $935 million (plus $565 million or minus $585 million) to avoid sanctions from the Centers for Medicare and Medicaid Services (CMS).

CMS threatened the payer with sanctions in a Feb. 27 letter, including an enrollment freeze, unless Elevance corrects years of what it says are improperly submitted Medicare Advantage (MA) risk adjustment data and makes sure this doesn’t happen again. The original submitted data resulted in CMS sometimes paying Elevance more than it was owed for care—overpayments that weren’t paid back, the letter says.

The deadline for corrections was originally March 30, per the letter, but was extended first until May 30 and then through July 31, Elevance CEO and President Gail Boudreaux said during an April 22 earnings call.

Experts are skeptical how big of a difference this CMS action is going to make given the company reported $1.8 billion in net earnings this quarter, however. (The company’s health benefits segment made over $42 billion in operating revenue before expenses, including nearly $11 billion from Medicare.)

Plus, the MA industry rakes in hundreds of billions of dollars in revenue each year.

“It is a considerable amount of money. Even for a company like Elevance, that’s nothing to sneeze at,” David Meyers, associate professor of health services, policy, and practice at Brown University School of Public Health, told us. “But at the same time, Elevance just posted in their earnings call, in the last week or so, huge profits.”

The big picture. CMS says in the letter it has sent “repeated” warnings to Elevance, which the agency alleges spent more than seven years failing to follow proper MA risk adjustment data submission and correction requirements.

The main issue is that, when patient medical records with dates of service from 2015 through 2023 failed to back up patient diagnosis codes, Elevance submitted some data corrections from November 2018 through October 2025 via a flash drive, a format CMS says it has “explicitly rejected.”

A spokesperson for CMS told Healthcare Brew the agency is "committed to ensuring accurate [MA] payments, compliance with federal requirements, and the protection of taxpayer dollars."

Meyers thinks this sanction threat could mean CMS is upping its enforcement of the MA industry. An enrollment freeze is “a pretty big tool to be used against plans, and it’s been used sometimes in the past, but almost never against companies as big as Elevance,” Meyers added.

For instance, the agency previously barred Cigna from enrolling new members for about a year and a half starting in January 2016 after the payer allegedly violated a range of regulations, including rules for coverage determinations, appeals, and grievances.

On the other hand…David Lipschutz, attorney and co-director of law and policy for the nonprofit Center for Medicare Advocacy, told Healthcare Brew he doubts this is a tipping point.

“Elevance’s assertion that it will cost $935 million…appears to be the cost of doing business rather than a reflection of more aggressive oversight and enforcement of program rules on the part of CMS,” Lipschutz said.

He reiterated that CMS has already extended the deadline. Elevance also shared in a March 18 news release that CMS specified some of its MA plans will be exempt if sanctions do take effect.

“It’s not a stretch to assume that other plan sponsors are not overly concerned about enhanced enforcement of rules they should already be complying with,” Lipschutz said.

Boudreaux emphasized during the company’s earnings call that this CMS notice is about past behavior and does not reflect the payer’s current “rigorous oversight and governance” of its risk adjustment program.

“It’s not about how we operate the business today,” she said.