Health Care Stocks Like UnitedHealth, CVS Tank On Wednesday: Here's Why

Health care stocks including UnitedHealth Group, Inc. UNH, Elevance Health, Inc. ELV and CVS Health Corp. CVS are tanking in Wednesday's extended trading after the Centers for Medicare & Medicaid Services (CMS) announced a significant expansion of its auditing efforts for Medicare Advantage (MA) plans. 

The Details: The Centers for Medicare & Medicaid Services said it will audit all eligible MA contracts for each payment year in newly initiated audits and invest additional resources to expedite the completion of audits in its backlog. 

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"We are committed to crushing fraud, waste and abuse across all federal healthcare programs," said Dr. Mehmet Oz, CMS Administrator. 

"While the Administration values the work that Medicare Advantage plans do, it is time CMS faithfully executes its duty to audit these plans and ensure they are billing the government accurately for the coverage they provide to Medicare patients," Dr. Oz added. 

The Trump administration will deploy advanced technology, expand the CMS workforce from 40 to 2,000 medical coders and increase its audit volume to all MA plans each year. 

CMS also said that its last significant recovery of MA overpayments occurred following the audit of payment year 2007 and estimates suggest MA plans may overbill the government by approximately $17 billion annually. 

CMS will now collaborate with the Department of Health and Human Services Office of Inspector General to recover uncollected overpayments identified in past audits.

UNH, ELV, CVS Price Action: After-hours on Wednesday, UnitedHealth stock was down 3.87% at $291.26, Elevance Health stock was down 1.28% at $394.99 and CVS Health shares were down 4.56% at $59.28 at the time of publication.

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