Aetna, whose shares fell 1.6 percent, said the suspension was effective April 21. It affects Aetna's Medicare Advantage and standalone prescription drug plans, but does not affect its current Medicare enrollees.
Aetna said the sanctions relate to compliance with requirements involving Medicare prescription drug plans, primarily tied to changes in the drugs covered by some plans from 2009 to 2010. Medicare is the U.S. government health plan for the elderly.
The No. 3 U.S. health insurer said it is cooperating with the U.S. Centers for Medicare & Medicaid Services (CMS), and is working to resolve the issues.
Compliance problems are unacceptable to Aetna; the issues raised to us by CMS have our utmost attention, Aetna President Mark Bertolini said.
Analysts shrugged off the suspension for Aetna, which is not as reliant on Medicare plans as rivals such as Humana Inc
It looks like a minor issue, Leerink Swann analyst Jason Gurda said. You wouldn't expect them to add many new members right now anyway.
The suspension echoed a similar action taken last year against WellPoint Inc
The open enrollment period has passed, so it's just not going to have a material effect (on Aetna) as long as they get the sanctions lifted by October 1, Collins Stewart analyst Brian Wright said.
S&P Equity Research analyst Phillip Seligman said he believed Aetna had already enrolled the bulk of its 2010 Medicare members and maintained his earnings projections.
Aetna shares fell 55 cents to $33.12 in morning trading on the New York Stock Exchange.
(Reporting by Lewis Krauskopf, editing by Gerald E. McCormick and Derek Caney)