** Shares of health insurers fall between 2.5% and 4.9% premarket after the U.S. Centers for Medicare & Medicaid Services said it would expand its auditing of Medicare Advantage plans

** CMS said late on Wednesday it would audit all eligible Medicare Advantage contracts each year and invest additional resources to complete audits for payment years 2018-2024 by early 2026

** The federal agency conducts risk adjustment data validation audits to confirm that diagnoses used for payment are supported by medical records

** UnitedHealth UNH.N fall 2.49% to $295.43, CVS CVS.N down 2.45% at $60.59, while Humana HUM.N slid 4.85% to $233.86

** Currently, CMS is several years behind in completing the audits

** This is yet another overhang facing the managed care industry, which is dealing with other pressures, says brokerage Oppenheimer

** The companies could be subject to claw backs of overpayments and lower margins in the business because of this regulatory move - Brokerage Morningstar

** Up to last close, HUM down ~3%, UNH down ~40%, while CVS up ~38% YTD

(Reporting by Sriparna Roy in Bengaluru)

((Sriparna.Roy@thomsonreuters.com;))