WellPoint Responds To Criticism on Rescissions


WellPoint Inc., the insurance company accused last week in a Reuters article of using a computer algorithm to target patients who have breast cancer in order to investigate and find cause to drop their coverage, has found itself quickly embroiled in a public relations nightmare.

News coverage of the potential rescission practice has been swift and harsh.   Now, the administration has become involved, with Health and Human Services Secretary Kathleen Sebelius entering the fray with a letter to the company.

April 22, 2010

[To: Angela Braly, WellPoint]

Dear Ms. Braly:

I was surprised and disappointed to read media accounts indicating that WellPoint routinely rescinds health insurance coverage from women recently diagnosed with breast cancer. Today’s report from Reuters indicating that your company “has specifically targeted women with breast cancer for aggressive investigation with the intent to cancel their policies” is disturbing, and this practice is deplorable.

As you know, the practice described in this article will soon be illegal. The Affordable Care Act specifically prohibits insurance companies from rescinding policies, except in cases of fraud or intentional misrepresentation of material fact.

WellPoint should not wait to end the unconscionable practice of deliberately working to deny health insurance coverage to women diagnosed with breast cancer. I urge you to immediately cease these practices and abandon your efforts to rescind health insurance coverage from patients who need it most.

Breast cancer is the second-leading type of cancer among women, has touched millions of families, and will affect one in eight American women during their lifetime. This year alone, an estimated 192,000 American women will be diagnosed with breast cancer.

I hope you will consider these women and their families as you work to end this harmful practice.

Sincerely,
Kathleen Sebelius

WellPoint, unhappy about the portrayal it is receiving in the media, sent out a press release of its own, meant to counter the Reuters article.  Among other talking points, it asserts that is algorithms do not just target breast cancer patients or pregnant women, but rather focus on inaccurate reporting of illness and disease to the company.

According to Wellpoint:

  • The story also misstates the role of what it terms computer algorithms.  Contrary to how its use was portrayed in the story, such software is used to look at a series of diagnostic codes meant to capture conditions that applicants would likely have known about at the time they applied for coverage.  We do not single out breast cancer or pregnancy.
  • The story focuses heavily on the practice of rescissions. As part of our normal business practices, WellPoint monitors claims for a variety of things, from indications of potential fraud to potential opportunities to improve quality and better coordinate care.  If something appears that it may be associated with a material misrepresentation, we may initiate an investigation.
  • In fact, last year less than one-tenth of 1 percent of our individual members’ policies were rescinded.

Of course, with over 33 million members, that is approximately 33,000 dropped policies, many of them the people who most need insurance.

The National Women’s Law Center reminds us why healthcare reform is so important, especially to women.

After all the phone calls, the rallies, and the voices raised to fight for health care reform, we are now faced with the reality that insurance companies plan to run wild to the very last minute. This means that many women may not live to see the benefits of our new hard-fought law. Though it is understandable that the health care reform law will take many years to implement and still many more years to perfect, it is hardly acceptable to believe that in the interim women should be subjected to continued discrimination and targeting by profit-hungry insurance companies.

The article provides a sad reminder of why passing a health care reform law was essential for millions of Americans in this country. And it is an important cautionary tale about how vital it is for us to properly implement the new law so that stories like these will be relics of our broken system.

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