WellPoint Settles, But Has It Become "Too Powerful to Take on?"

We just posted about the latest travails of the UnitedHealth Group, a for-profit managed care organization founded by one of the early advocates of managed care as the cure for health care problems. Lately, the company has been better known for the lavish compensation it gave its former CEO.

Another large, for-profit managed care organization/ health insurer has also lately been in the news, and not in favorable terms. We have previously discussed how Wellpoint Inc and/or its subsidiaries:

• misplaced a computer disc containing confidential information on 75,000 policy-holders (see post here)
• settled a RICO (racketeer influenced corrupt organization) law-suit in California over its alleged systematic attempts to withhold payments from physicians (see post here)
• was fined for cancelling individual insurance policies (again in California) after their holders filed claims (see post here)
• was found to have mis-handled at least half of its revocations of individual policies (see post here)
• was accused of asking physicians to tattle on patients' problems that could be grounds for post-hoc revocation of their insurance policies (see post here).
  

Last week, the Associated Press (via the San Francisco Chonicle) reported that Wellpoint is so well known for its fierce legal tactics that the California agency which was supposed to fine it for its practices of cancelling individual health policies post-hoc never collected the fine.

California regulators admitted Thursday that for more than a year they didn't even try to enforce a million-dollar fine against health insurer Anthem Blue Cross because they knew they would be outgunned in court.

In early 2007, the Department of Managed Health Care pledged to fine the state's largest insurer for 'routinely rescinding health insurance policies in violation of state law.'

But it never did.

The department's director, Cindy Ehnes, said Thursday that, when it comes to rescissions, the agency has succeeded in forcing smaller insurers to reinstate illegally canceled policies and pay fines, but Blue Cross is too powerful to take on.

'In each and every one of those rescissions, (Blue Cross has) the right to contest each, and that could tie us up in court forever,' Ehnes said of about 1,770 Blue Cross rescissions since Jan. 1, 2004.

'They have the largest number of rescissions, so as a practical matter for the department it does present some practical challenges that are different from a Health Net (of California) or a PacifiCare,' referring to providers who, along with Kaiser Permanente, have made settlements with the state to reinstate health care coverage.
That means that although Anthem Blue Cross has the highest number of alleged illegal rescissions, it may face the least regulatory consequence simply because of its sheer size and its skill in legal intimidation.

Note that Anthem Blue Cross is now a Wellpoint Inc subsidiary.

Once this story came to light, the Associated Press again reported (per the San Francisco Chronicle),

California health insurance regulators are scrutinizing 1,770 patient policies canceled by Anthem Blue Cross to see if they can impose a penalty stiffer than a $1 million fine they announced but never enforced last year.

Each case of a canceled policy carries the possibility of a $200,000 maximum fine against the state's largest insurer, which could dwarf the now-abandoned 2007 fine.

Meanwhile, the company agreed to settle a set of lawsuits related to its policy cancellations (per the Los Angeles Times),

Anthem Blue Cross parent WellPoint Inc. agreed Monday to pay $11.8 million to settle claims from about 480 California hospitals that it failed to cover the bills of patients it dropped after they were treated -- a controversial practice known as rescission.

The hospitals, including most private and public facilities in California, say they provided emergency and authorized care to patients who were, at the time of treatment, Blue Cross members in good standing. Only later, they contended, did Blue Cross drop the patients and renege on its obligation to pay their bills.

So once again, we note a big health care organization whose actions seem to directly contradict its ostensible mission. The Wellpoint Inc statement of "Our Commitments" includes,

At WellPoint, we are dedicated to improving the lives of the people we serve and the health of our communities. From the boardroom to the mailroom, every associate is expected to honor the company's commitments to our diverse customers, fellow associates, shareholders and the communities we serve - helping us become the most trusted choice among consumers.

Our business strategies mirror our commitment to providing affordable quality care to our members and the public. In line with our vision to become the most valued company in our industry, we must:

* Bring affordable quality health care and coverage to medically underserved communities
* Educate people to take an active role in their own health
* Work with our health care partners to improve quality of care
* Help shape public policy that makes health care more affordable and more accessible

Say what? How in the world does this company expect to be "the most trusted choice" given its track record above? How does cancelling policies post-hoc after their holders get sick "make health care more affordable and accessible?"

Note that WellPoint seems to rival its main competitor, UnitedHealth Group, in the extent its actions contradict its ostensibly lofty ideals.

This sorry tale suggests another point. As health care organizations grow ever bigger and more powerful, they effectively become less accountable. Effectively, might makes right. Note that the initial response of state regulators to just one set of Wellpoint's problems was that the company has just too big, powerful and aggressive to take on.

This has become the story of our health care system. Increasing concentration of power leading to ever stronger and less responsible and accountable vested interests. It will take united action by health care professionals and the public to fix this mess.