Health insurers fall as US to expand audits of Medicare Advantage plans

Shares of health insurers fall between 2.5% and 4.9% premarket after the U.S. Centers for Medicare & Medicaid Services said it would expand its auditing of Medicare Advantage plans

CMS said late on Wednesday it would audit all eligible Medicare Advantage contracts each year and invest additional resources to complete audits for payment years 2018-2024 by early 2026

The federal agency conducts risk adjustment data validation audits to confirm that diagnoses used for payment are supported by medical records

UnitedHealth UNH.N fall 2.49% to $295.43, CVS CVS.N down 2.45% at $60.59, while Humana HUM.N slid 4.85% to $233.86

Currently, CMS is several years behind in completing the audits

This is yet another overhang facing the managed care industry, which is dealing with other pressures, says brokerage Oppenheimer

The companies could be subject to claw backs of overpayments and lower margins in the business because of this regulatory move - Brokerage Morningstar

Up to last close, HUM down ~3%, UNH down ~40%, while CVS up ~38% YTD