On Thursday, Reuters ran a story describing a policy at insurance company WellPoint of automatically reviewing any customer who contracted breast cancer for possible fraud, leading to some patients losing their coverage. The company is contesting the story, with a lengthy, rather legalistic statement on its website.
The story . . . misstates the role of what it terms computer algorithms. Contrary to how its use was portrayed in the story, such software is used to look at a series of diagnostic codes meant to capture conditions that applicants would likely have known about at the time they applied for coverage. We do not single out breast cancer or pregnancy.
The White House meanwhile is piling on. On Thursday, Health and Human Services Secretary Kathleen Sebelius sent a letter to WellPoint’s CEO asking that the company stop the practice of reviewing the claims of sick women. “I hope you will consider these women and their families as you work to end this harmful practice,” Sebelius writes. (Read the whole letter here.) Sebelius’s claim that recently passed health care reform will end WellPoint’s rescission effort is not so clear cut. As WellPoint and Reuters seem to make clear, the sick women’s policies were reviewed for evidence of fraud. Under the new law, insurance companies can still cancel policies “in cases of fraud or intentional misrepresentation of material fact,” as Sebelius notes.
UPDATE: WellPoint has responded to the Sebelius letter with a sharply worded letter of its own, with the CEO saying she is “disappointed” with Sebelius and the “needless anxiety and fear” she is causing. “To be absolutely clear, WellPoint does not single out women with breast cancer for rescission. Period.” Read the entire letter as a pdf here.