Federal officials temporarily banned health insurer WellPoint Inc. from marketing or selling Medicare health or drug plans after they said computer problems caused it to deny thousands of seniors coverage for vital medications and cancel their benefits.
The ban, effective late Monday, is one of the toughest penalties levied on a private Medicare plan provider since the introduction of the government program's drug benefit three years ago.
In an unusually terse letter to WellPoint, the government agency that oversees Medicare said the company's 'longstanding and persistent failure to comply with [Medicare] requirements' had begun to pose 'a serious threat to the health and safety' of Medicare beneficiaries.
WellPoint, the country's largest health insurer, is the fourth-largest provider of Medicare drug plans.
The problems at WellPoint stem from computer glitches that began at least six months ago, an issue that Medicare officials had been monitoring and that the company says it had been trying to fix. But the problems surged and became more serious at the start of this year, when WellPoint's systems failed to accurately process some of the new data for its 2009 plans, said the Centers for Medicare and Medicaid or CMS, the agency that runs the health-care program for the elderly.
As a result, thousands of seniors found they couldn't fill or renew prescriptions for drugs to treat chronic heart failure, seizures, asthma and other medications, the agency said. WellPoint also mistakenly dropped coverage for many beneficiaries and overcharged others.
'Furthermore, WellPoint failed to follow through on assurances to CMS that the problem was immediately and fully corrected,' the agency's letter said.
The computer problems are just the latest at WellPoint. Last year, a project to consolidate some claims-processing systems caused it to miscalculate how fast its medical costs rose and to underprice some of its commercial plans, ultimately contributing to a profit warning.
We just posted about how often the antics of the leadership of managed care/ health insurance giant UnitedHealth provide material for Health Care Renewal. Even larger health care insurer/ managed care organization WellPoint has also been a frequent flier on our electronic pages. We most recently posted about financial management issues at WellPoint here, and insurance coverage issues here.
Yet despite evidence of mismanagement and worse leadership problems at large health care organizations, these organizations remain dominant players in our dysfunctional health care system, and the managers and executives who ought to be accountable for these problems continue to blithely collect their tremendous compensation packages.
As we have said until blue in the face, ill-informed, incompetent, conflicted and even corrupt leadership of ever larger and more powerful health care organizations, enabled by opaque, unrepresentative, unaccountable governance not subject to ethical standards, continues as probably the most important cause of health care dysfunction.