Medicare closes off WellPoint's drug plan

Washington -- Thousands of Medicare beneficiaries enrolled in WellPoint's prescription drug plan have been denied access to medications since the beginning of the year due to internal problems with the company's systems. The breakdown prompted federal officials to take the extraordinary step of blocking the insurer from taking on any new enrollees.

The Centers for Medicare & Medicaid Services on Jan. 12 sent a letter to WellPoint informing the insurer it was suspended indefinitely from enrolling beneficiaries in Part D and Medicare Advantage. The company also cannot issue any marketing materials related to the programs. WellPoint has "demonstrated a longstanding and persistent failure to comply with requirements for proper administration" of the plans, CMS stated.

Officials decided to impose immediate sanctions because complaints against WellPoint from enrollees spiked recently -- from fewer than 100 in all of December to more than 500 in the first half of January alone, said CMS spokesman Peter Ashkenaz. "We've been reaching out to beneficiaries to make sure they have everything they need," he said. CMS has not ruled out reassigning low-income beneficiaries who were automatically enrolled in WellPoint's plan.

The system glitches have long been known both to WellPoint and CMS but did not lead to federal corrective action until the problems escalated after the new year. The insurer said in a Jan. 12 statement that it was surprised by the action because it has been working with CMS for the past six months to try to resolve the issues.

Jocelyne Watrous, a beneficiary consultant with the Center for Medicare Advocacy in Mansfield, Conn., has encountered Medicare patients who recently were denied vital drugs. One AIDS patient contacted Watrous in early January when she found she was no longer eligible for her medications, an apparent result of WellPoint computer glitches. "The pharmacist told her there were several similar cases like that," Watrous said.

The Medicare Rights Center in Washington, D.C., also found a number of cases in which WellPoint beneficiaries erroneously were denied access to medications, said Paul Precht, the center's spokesman.

This is not the first time CMS has imposed such sanctions on an insurer -- it levied similar punitive measures against Florida-based Citrus Health Care in December 2008. But it might be the most high-profile. "This is the toughest letter I've ever seen from CMS," Precht said.