Maximus's Contract with CMS for Medicare Services Canceled; Shares Plummet

Maximus (NYSE:MMS), an important government services provider, announced the cancellation of the Communication Center Operations (CCO) bid for the 1-800-MEDICARE and the Federal Marketplace by the U.S. Department of Health and Human Services and the Centers for Medicare and Medicaid Services (CMS). This bid was planned for services that Maximus is currently providing, with optional periods extending until 2031.

Following the announcement, trading of Maximus shares was temporarily halted. When trading resumed after hours, the company’s stock value fell by 8%.

Bruce Caswell, President and CEO of Maximus, acknowledged the cancellation decision while highlighting the company’s successful past in managing the program. Caswell stated, "Maximus employees have continuously demonstrated their ability to successfully manage this critical program that provides essential support to more than 75 million eligible Americans relying on Medicare and the Federal Marketplace. We appreciate the opportunity to continue supporting HHS and CMS in their vital missions, and we look forward to delivering innovative, high-quality, and reliable solutions that benefit the American public."

The canceled bid corresponds to work that Maximus is currently performing, indicating a shift in CMS's approach to managing communication center operations for Medicare and the Federal Marketplace. The impact of this cancellation on Maximus's operations and future government contracts remains uncertain.