April 22, 2010

Time for Kathleen Sibelius to step in again. This time Wellpoint leads the way by targeting key groups of insureds for fraud investigations. Their first experiment appears to be women diagnosed with breast cancer.

Via Reuters:

The women all paid their premiums on time. Before they fell ill, none had any problems with their insurance. Initially, they believed their policies had been canceled by mistake.

They had no idea that WellPoint was using a computer algorithm that automatically targeted them and every other policyholder recently diagnosed with breast cancer. The software triggered an immediate fraud investigation, as the company searched for some pretext to drop their policies, according to government regulators and investigators.

Once the women were singled out, they say, the insurer then canceled their policies based on either erroneous or flimsy information. WellPoint declined to comment on the women's specific cases without a signed waiver from them, citing privacy laws.

h/t Wonk Room

This type of behavior has been smacked down before and now has the force of the new health care reform law to do it again. You'd think insurers would get the message, right?

Not so much. This morning I received a report of an employer conducting a "dependent eligibility audit." This isn't the first time I've heard of these, but this one is particularly ugly. For obvious reasons, I've removed names and the identity of their employer.

...I am pretty sure my family is currently being targeted by [my spouse's employer] and Aetna because of my child's recent [redacted for privacy] diagnosis. Just a month after his Dx we received a notice in the mail letting us know that we were being "audited" by the health insurance co to make sure that [my child and I] were actually legally related to [my spouse] and eligible for health benefits. We were asked to fax in copies of our marriage certificate and IDs and our child's birth certificate...We did. HR confirmed it.

...Today I got a call saying that we still haven't sent in the requested paperwork and are in immediate danger of being dropped from the health plan. And they claim to have no record of the paperwork we sent in.

This press release from HRAdvance is pretty clear about why these "dependent eligibility audits" are taking place:

[Section 2712] of the PPACA prohibits the rescinding of health insurance for any reason other than ‘fraud' and ‘intentional misrepresentation of material'. Proving that an employee has committed fraud can be extremely difficult, and will only become more challenging in the future. "A dependent eligibility audit provider who can assist in those efforts will be key to success," states Brennan Clipp, Senior Vice President of Sales at HRAdvance.

Simply stated, these audits are intended to build a database of people they can target for fraud or misrepresentation if they should be diagnosed with anything from acne to hives to breast cancer later on. This person's report of the supposed non-receipt of sensitive documents bothers me, too. It makes me wonder why documents faxed from the same machine wouldn't always reach their intended recipient, particularly in light of the specific circumstances.

The good news? They're pushing the limits and the edges early, giving Sec. Sibelius a great foundation to slap them back like she did when they started rumbling about not covering children with pre-existing conditions.

The bad news? We're all going to have to watch out for each other every step of the way, because they're doing this to people through their employers, causing them to fear for their jobs if they get caught in one of the insurance company's "algorithms".

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