CMS halts WellPoint Medicare plans

February 1, 2009

WellPoint sanctions might be indicative of deeper oversight problems in Medicare.

"Clearly, computer systems need to be updated, but the problem here stems from the push toward private delivery mechanisms, and, within that push, the emphasis on providing unlimited choices rather than on quality of choice," she says.

She believes patients wouldn't have to worry about such problems if the drug benefit were administered by the traditional Medicare program.

WellPoint has 1.9 million members in its Part D plan and 472,000 in its private Medicare health plans.

In its letter to the company, CMS cited the insurer's "longstanding and persistent" failure to meet Medicare's requirements, resulting in a "serious threat" to the health of its members. While the sanctions were prompted by a flurry of consumer complaints over a two-week period, the computer problems had been going on for months. In fact, WellPoint had been providing CMS with details of its plans to fix the problems and even hired a third-party company to report on its progress.

ACTION SURPRISING

Because of those regular interactions with the agency, WellPoint executives were taken aback by CMS' sanctions. "Since we have been meeting with CMS on a regular basis regarding our remediation process, we were surprised by this recent action," an emailed statement said. "We have made significant progress in addressing these issues."

While some believe the harshness of WellPoint's punishment is a sign of tougher and more vigilant government enforcement, others disagree. The fact that it took CMS months to sanction WellPoint is indicative of another problem: not enough oversight and enforcement of Medicare's requirements.

"We have been concerned that, because CMS has seen its role more as a partner than as a regulator, [the government] has not acted efficiently and sufficiently when plans fail to comply with rules," Gottlich says. "We have had other experiences of plan sponsors being sanctioned by CMS, only to engage in similar activity. Those of us who follow it see this as a black eye for the entire Medicare Part D program, as will the [WellPoint] beneficiaries who couldn't get their medicine.

"I don't think the public will have the same perception, however. CMS did a good job of portraying this as finding problems, hearing beneficiary complaints during the first nine days of the year, and then taking action," she says.