The third of February 2011 was mostly a ho-hum day on Wall Street — but not for companies offering Medicare Advantage plans. Several of those firms hit the jackpot, tacking on billions of dollars in new value after federal officials signaled they might go easy on health plans suspected of overcharging the government.
The stocks took off after the federal Centers for Medicare and Medicaid Services advised the health plans in a memo that it was rethinking a move to ratchet up audits of the privately run Medicare plans. Some of these plans are run by publicly traded insurance companies whose fortunes can rise and fall significantly upon news of a change in Medicare policy.
At the time, health insurers were dreading the prospect of tougher audits, fearing they could wind up owing the government millions of dollars as a result.
Source: Florida Bulldog/Fred Schulte