Friday, May 05, 2006

Did WellPoint Retroactively Cancel Health Insurance Because Policy Holders Made Mistakes Filling Out Forms?

Last month, the Indianapolis Star reported on a set of lawsuits filed in California against health care insurance giant Wellpoint. Wellpoint has previously graced the pages of the blog when it settled a RICO (racketeering influenced and corrupt organizations) lawsuit brought by physicians in California about its claims paying practices.

According to the Star, "the suits claim that Blue Cross used a 'retroaction review department' to comb through already approved health insurance applications, looking for any potential misstatements or omissions so that it could cancel policies and avoid paying expensive medical claims." One plaintiff claimed that after she was diagnosed with breast cancer, Wellpoint Blue Cross cancelled her coverage because she "had failed to disclose on her original application that she had been exposed to hepatitis B." The plaintiff claimed "she had been exposed as a child and was unaware of any problems from the exposure." Another plaintiff claimed that after having gynecological surgery, the company cancelled her policy because "she had not disclosed that she had been treated for severe, migrainelike headaches in 2000." However, "that section on the application covering headaches, she said, appeared with conditions including seizures and epilepsy. 'I had checked no on that box,' Villa said in an interview. 'I didn't associate myself with seizures or stroke or epilepsy.'"

The Star quoted Edward West, Senior Vice President of Corporate Communications for Wellpoint, "We are in full compliance with the legal obligations that we have to our members." Furthermore, he stated, "We do not have a department within WellPoint that acts the way he described in his lawsuits."

However, late last month, the Los Angeles Times followed up on this story. The paper was able to obtain some records of testimony during legal proceedings resulting from one of these lawsuits. According to the Times, the testimony
offer[ed] a glimpse into the work of a four-person unit that, employees testified, reviews as many as 1,500 policies a week and cancels those whose holders misstated or omitted facts found in medical records — inadvertently or otherwise.
In one exchange, plaintiffs' attorney William M. Shernoff of Claremont asked if, under Blue Cross procedures, it mattered 'whether the nondisclosure was inadvertent or willful.'
Cynthia Rosenfeld — identified only as the employee most knowledgeable about the cancellations — replied, 'We just look at whether the condition was disclosed on the application.'
'Period, correct?' Shernoff asked.
A second employee, Sheila Millan, testified that the reviews were triggered by claims made for treatment for certain illnesses, such as hypertension, diabetes and cardiovascular disease.
'When a claim comes in and there is a certain diagnosis, that would pretty much [consign] them to be reviewed for a possible preexisting condition,' Millan testified. 'There is a list.'
Commented physician and attorney Bryan Liang from the University of California at San Diego medical school and the California Western School of Law, "This just strikes me as so unfair and inequitable." It also appears that WellPoint Vice President West may have been caught making an inoperative statement, as one of our former US Presidents used to say. Stay tuned on this one. Obviously, it does not engender a lot of warm and fuzzy feelings about the operations of WellPoint.

1 comment:

APeticola said...

One justifiable barrier to implementation of electronic medical records in this country is people's fear that (since we don't have universal healthcare nor community insurance ratings) the more medical information insurers have about them, the more they will be denied access to care. This story is a great example of why that fear is not unfounded.