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Key Takeaways

• Shares of Humana and other health insurers fell Thursday after the Centers for Medicare & Medicaid Services said it plans a "significant expansion" of its auditing efforts for Medicare Advantage plans.

• The agency said it plans to audit all eligible Medicare Advantage plan contracts for each payment year, and invest more resources.

• CMS Administrator Mehmet Oz said the agency is “committed to crushing fraud, waste and abuse."

Shares of Humana (HUM) and other health insurers fell Thursday after the Centers for Medicare & Medicaid Services said it plans to take a more "aggressive" approach to auditing Medicare Advantage plans.

The agency said it will undergo a "significant expansion" of its auditing efforts and audit all eligible Medicare Advantage plan contracts for each payment year, as well as invest more resources to complete audits faster.

“We are committed to crushing fraud, waste and abuse across all federal healthcare programs,” CMS Administrator Mehmet Oz said. “While the Administration values the work that Medicare Advantage plans do, it is time CMS faithfully executes its duty to audit these plans.”

Shares of Humana, which offers Medicare Advantage plans, dropped 6% in recent trading. Aetna parent CVS Health (CVS) saw its stock fall close to 3%, while UnitedHealth Group (UNH) slid about 2%.

In a post on X, UnitedHealth said, “We welcome CMS’s announcement to audit every Medicare Advantage plan each year.” CVS and Humana did not immediately respond to a request for comment.

UnitedHealth's move extends losses Wednesday amid worries about potential cuts to Medicaid and Medicare, and a report from The Guardian alleging the insurer paid secret bonuses to nursing homes in order to reduce hospital transfers for residents and lower costs.

This article has been updated since it was first published for greater clarity on concerns about potential cuts to Medicaid and Medicare.

Read the original article on Investopedia