According to the lawsuit, defendants made false and/or misleading statements and/or failed to disclose that, with the Medicaid redetermination process nearly complete, defendants represented to investors that they were closely monitoring cost trends associated with the redetermination process and that the premium rates Elevance was negotiating with states were sufficient to address the risk and cost profiles of those patients staying on Medicaid programs. While defendants acknowledged that Medicaid expenses were rising, they repeatedly assured investors that this was adequately reflected in Elevance’s guidance for the year. These representations were materially false or misleading. In truth, the redeterminations were causing the acuity and utilization of Elevance’s Medicaid members to rise significantly, as the members being removed from Medicaid programs were, on average, healthier than those who remained eligible for the programs. This shift was occurring to a degree that was not reflected in Elevance’s rate negotiations with the states or in its financial guidance for 2024.
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