Wellcare faces allegations about director's resignation; Wellpoint confronts reports regarding breast cancer recissions

The Wall Street Journal: "A prominent director at WellCare Health Plans Inc. resigned Wednesday and raised questions about accounting practices at the Medicare and Medicaid company. Regina Herzlinger, the head of the board's audit committee and a professor of business administration at Harvard Business School, said internal audits found WellCare overbilled the Illinois Medicaid program by $1 million in 2009 and potentially overcharged states for almost $500,000 worth of maternity care." She also said the company "ran afoul of Georgia's requirements that it account for each patient visit for which it paid providers, resulting in a $610,000 fine." Herzlinger also said "she had hoped to provide oversight, as chairwoman of the audit committee, but that the board didn't renominate her for re-election at this year's annual meeting of shareholders." It is her opinion that "the board forced her out for asking questions about accounting problems and corporate-governance practices." But "WellCare said good corporate-governance practices require it to bring in new board members periodically to provide a fresh perspective" (Johnson and Lublin, 4/24).

CQ HealthBeat: "A new battle involving breast cancer broke out Friday after Health and Human Services Secretary Kathleen Sebelius sent a letter to WellPoint executives urging that the health insurance giant immediately end 'the unconscionable practice of deliberately working to deny health insurance coverage to women diagnosed with breast cancer' in the wake of news reports about rescissions at WellPoint." WellPoint President and CEO Angela Braly "said in a lengthy reply Friday afternoon that both Sebelius' letter and the news story on which it was based 'grossly misrepresent' WellPoint's efforts to prevent, detect and treat breast cancer among policy holders. … Under the law (PL 111-148), later this year insurance companies will be banned from dropping coverage for people who become sick, a practice called rescissions." Reuters reported on Friday that the company "used a computer algorithm that immediately targeted for aggressive fraud investigations women who began treatment for breast cancer. The women held policies with subsidiaries of WellPoint. ... In a Thursday response to the news story, WellPoint said it is 'simply wrong' that the company targets breast cancer victims and in fact has worked to encourage prevention and early detection" (Norman, 3/23).

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This article was reprinted from khn.org with permission from the Henry J. Kaiser Family Foundation. Kaiser Health News, an editorially independent news service, is a program of the Kaiser Family Foundation, a nonpartisan health care policy research organization unaffiliated with Kaiser Permanente.