Elevance laying off 123 California employees
The layoffs come on the heels of an earnings call in which the company said it was exploring options after a star ratings hit.
Photo: Dean Mitchell/Getty Images
Elevance Health is laying off a combined 123 employees across two southern California locations, according to regulatory documents filed this month.
The insurer is laying off 64 employees at a Carelon office in Cerritos, and 59 at Anthem Blue Cross in Woodland Hills. The layoffs are listed as "permanent" in the state's newest Worker Adjustment and Retraining Notification Act (WARN) report.
WHAT'S THE IMPACT?
The layoffs come on the heels of an earnings call in which Elevance reported a 22.5% year-over-year decrease in net income in Q3. Shares of Elevance Health fell 12% after the health insurer lowered its forecast for full-year earnings.
Boudreaux cited Medicaid and the timing mismatch between Medicaid rates and acuity. It was a reason also given by UnitedHealth Group as a headwind in its earnings.
Boudreaux also said the company was "considering all of our options" regarding the Centers for Medicare and Medicaid Services' 2025 Medicare Advantage Star Ratings, which saw the company take a hit in its star ratings.
Boudreaux said that, even though Elevance improved its performance across nearly 60% of star measures for payment year 2026, its lower ratings this year are having a tangible effect.
In June Elevance became the second insurer, after SCAN Health Plan, to win a case against the federal government over Medicare Advantage payments. In the June lawsuit, Elevance took issue with CMS's decision to change the methodology to determine star ratings, which included recalculating the 2023 cut points. It argued that, because CMS used simulated 2023 cut points instead of the actual 2023 cut points, several of its insurance plans received lower star ratings than they otherwise would have received.
THE LARGER TREND
Included in the same WARN report are the layoffs that UnitedHealth Group subsidiary Optum announced in July – 524 of them in total, all also in California.
There were 221 permanent layoffs in Los Angeles County, with 64 in Segundo and 157 in Cerritos. In San Bernardino County, a permanent closure is affecting 71 employees in Redlands and Highland. In Riverside County, 23 employees are affected by a permanent closure in Beaumont. In Orange County, 12 are affected by a permanent closure, another 194 in Los Angeles County and three in Alameda County.
Many of the layoffs are at urgent care facilities, according to a letter Optum submitted to the Employment Development Department that was posted through SiliconValley.com. Optum did not provide a reason for the job cuts in its letter.
Jeff Lagasse is editor of Healthcare Finance News.
Email: jlagasse@himss.org
Healthcare Finance News is a HIMSS Media publication.
