Health plan responds angrily to Obama mention of rescission
■ WellPoint CEO denies the insurer is dropping patients diagnosed with breast cancer, as a news service had reported.
By Bob Cook — Posted May 17, 2010
When President Obama brought up insurance companies' rescission practices during his May 8 radio and Internet address, he didn't call out WellPoint by name. But the company knew who he was talking about -- and it fired back a letter saying it didn't appreciate the mention.
As Obama discussed the positive effects he saw from the health system reform law enacted in late March, he talked about a provision that prevents insurers from dropping patients who are sick, a practice known as rescission. Health plans say they use it to prevent fraud -- such as a patient not disclosing a preexisting condition -- but regulators have admonished plans for using it to invent reasons to cut off patients who file for large claims because of illness.
Obama said the provision takes effect in September. But "when we found out that an insurance company was systematically dropping the coverage of women diagnosed with breast cancer, my administration called on them to put an end to this practice immediately." Obama added that, as a result, all insurers agreed to implement the health system reform's anti-rescission provision as of late April.
The Obama administration -- which has had various political tussles with WellPoint, particularly over rate hikes for individual plans -- spoke out against the company after a report by Reuters over its rescission practices. The news service, quoting federal and state investigators, reported that WellPoint used a computer algorithm to target every individual policy holder diagnosed with breast cancer for an immediate fraud investigation, looking for any reason possible to drop coverage. In response, Dept. of Health and Human Services Secretary Kathleen Sebelius on April 23 wrote a letter to WellPoint asking the company to stop the practice.
WellPoint CEO Angela Braly, in an April 23 letter to HHS, responded to Sebelius that her letter and the Reuters report were inaccurate, and that the company "does not single out women with breast cancer for rescission. Period." When Obama referred to the fallout of that report, Braly on May 8 sent him a similar note.
"I was disappointed to hear you repeat false information regarding WellPoint's coverage of breast cancer," Braly wrote. "To be absolutely clear, despite your claims, WellPoint does not single out women with breast cancer for rescission. Period."
Braly wrote that four of 200,000 breast cancer cases or possible breast cancer cases it covered were singled out for rescission, "but they were not singled out because of their breast cancer." She said the insurer has been a leader in screening and paying for treatment of the disease.
Braly also repeated WellPoint's position on the reasons for higher insurance costs: increased utilization, the cost and frequency of providing medical services, and "the increased costs borne by the insured population when healthy individuals choose not to carry health care coverage."