Investigation: WellPoint Rescinded Policies From Breast Cancer Patients
Government regulators and investigators say that the insurer WellPoint used computer algorithms to identify female policyholders with breast cancer and launch automatic fraud investigations of the women's policies, at times resulting in rescissions, according to a Reuters investigation.
Federal investigators told Reuters that WellPoint specifically targeted women diagnosed with breast cancer.
Women whose insurance was rescinded say the company used small errors in their medical files or insurance documents as a justification to cancel their policies or deny them coverage for certain procedures and treatments.
Earlier California Action
In 2007, the California Department of Managed Health Care conducted an investigation of Anthem Blue Cross of California -- a WellPoint subsidiary -- and identified numerous instances in which the insurer canceled coverage for policyholders diagnosed with serious conditions.
In 2008, Anthem agreed to pay a $10 million fine to settle DMHC's charges that it illegally rescinded more than 1,100 policies. In February 2009, Anthem agreed to pay a $1 million fine and $14 million in restitution to settle a separate lawsuit brought by the California Department of Insurance that alleged the company illegally rescinded 2,330 policies.
The company also is involved in an ongoing investigation related to a July 2008 lawsuit from the Los Angeles city attorney's office that alleges the company illegally rescinded the policies of more than 6,000 state residents.
WellPoint denies any wrongdoing. In a statement for the Reuters story, WellPoint said the California settlements "expressly denied any admission of wrongdoing on the part of the company; companies settle matters for a number of reasons."
WellPoint also said that it only rescinds policies if it finds inaccurate information in a policyholder's records, adding that the practice is necessary to maintain low costs for other customers (Waas, Reuters, 4/22).
Sebelius Urges WellPoint To End Practice
On Thursday, HHS Secretary Kathleen Sebelius sent Braly a letter in response to the Reuters story, which Sebelius called "disturbing."
Sebelius wroteÂ that the practice of rescissions "will soon be illegal" under a provision of the federal health reform law, which "specifically prohibits insurance companies from rescinding policies, except in cases of fraud or intentional misrepresentation of material fact" (HHS release, 4/22).
On Thursday, MSNBC's "Countdown" reported on the Reuters investigation. The segment also includes a discussion with filmmaker Michael Moore (O'Donnell, "Countdown," MSNBC, 4/22).This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.