Indiana medical association files complaint against WellPoint over payment problems

Citing hundreds of complaints over problems ranging from claims paid more than a year late to payments sent to the wrong doctor, the Indiana State Medical Assn. has filed a dispute alleging that WellPoint violated the terms of its 2005 class-action settlement with physicians.

The ISMA filed the complaint July 9, less than a week before WellPoint's settlement expired July 15.

The complaint may be resolved between the group and WellPoint alone, go to mediation or to a hearing before an arbitrator.

The 2005 settlement required WellPoint to pay physicians correctly and on time -- within 30 days for paper claims and 15 days for electronic claims -- and to make its claims process more transparent to physicians. It also agreed to improve its claims adjudication systems.

The ISMA complaint alleges that WellPoint's Midwest subsidiary Anthem has failed in all of those areas, and that it did so during the majority of the settlement's "effective period."

Cameron Staples, the Connecticut attorney who is the WellPoint compliance dispute facilitator, said about 50 previous compliance disputes had been filed against WellPoint. He said the vast majority were resolved before even reaching mediation, and none had required a hearing.

WellPoint was one of several health plans, including most major Blues plans as well as Aetna, Cigna, Health Net and Humana, that settled class-action lawsuits brought in multiple jurisdictions in 2000, but consolidated in federal court in Miami. Settlement terms varied. But they generally required the insurers to end practices that doctors said unfairly and systematically cut their pay.

WellPoint has admitted that it had problems paying claims on time and correctly after adopting a computer system in October 2007 to allow Anthem to process claims under the "BlueCard" program. The BlueCard program allows Blues plans to process each others' claims if a member of one plan goes out of state for care.

The system migration affected Indiana, Kentucky, Missouri, Ohio and Wisconsin. The Ohio State Medical Assn. has complained to its state insurance department about the same type of problems outlined in ISMA's complaint.

Staples said that if an arbitrator finds that WellPoint did violate its agreement and that those violations happened outside Indiana as well, he can order that the company address the problems systemwide, not only in Indiana.

ISMA legal counsel Julie Reed said complaints have continued despite Anthem's insistence that the problems have been resolved.

In one example, according to ISMA, getting a single claim paid required one practice to contact the company 16 times by phone and letter, speak with 10 different plan representatives, submit associated medical records twice, and track five assigned "reference numbers" over the course of 15 months.

The compliance dispute didn't only stem from the claims payment problems, but also from Anthem's inability to correct them within the time lines the company itself set, and its refusal to communicate with doctors about what was going on, Reed said.

WellPoint officials have also told investors that the problems were resolved.

"Anthem believes that it has complied with the settlement agreement and we intend to vigorously defend our position," spokesman Tony Felts said in an e-mailed statement. "We are disappointed with the action taken by the ISMA in light of the tremendous progress we've made to address their concerns."

Felts said Anthem in Indiana had "redoubled its efforts" in recent months, resulting in 96% of claims submitted under the "BlueCard" program being processed and paid correctly within 30 days.

But Reed said the claims that Anthem does pay are often incorrect or misdirected.

She said the problems also went beyond just paying bills -- there were times Anthem representatives suggested to members that the physician's office was responsible for a claim paid late or incorrectly, Reed said.

"Anthem hid from it and really did some misdirection," she said. "The patient suddenly wonders who knows what they're doing and why didn't the doctor's office do this right the first time ... it really has strained relationships."