Wellpoint Class Action

Wellpoint to stop select reimbursements

Health insurer WellPoint Inc. will start making hospitals pay for certain medical mistakes by cutting off reimbursement. The insurer announced Wednesday it will not cover costs tied to three major medical errors, so-called "never events" like surgery on the wrong body part. It also may withhold payment for expenses tied to eight other problems triggered by hospital care, including bedsores or infections from a catheter.

WellPoint, the nation's largest health insurer with nearly 35 million members, is the latest payer to crack down on medical mistakes. The federal insurer Medicare has said bedsores and other preventable injuries will affect the level of reimbursement it provides.

Aetna announced several weeks ago it would no longer pay for "never events," a list of 28 serious and rare medical errors devised by the nonprofit National Quality Forum. Never events are mistakes that should never happen to patients, according to the forum.

WellPoint devised its list to spur improvement in U.S. hospital care, which is "not as high as it needs to be," according to Dr. Sam Nussbaum, the company's chief medical officer.

"It does not parallel the breathtaking advances in sciences and medicine that we know can make a difference in peoples lives," he said.

The insurer will cut off payment if surgery is done on the wrong patient or body part or if the wrong surgery is performed. It also may withhold payments tied to a host of other, more common problems. For instance, WellPoint may deny reimbursement for costs related to an infection caused by a catheter that was not changed frequently enough.

If WellPoint withholds payment, the hospitals -- not the patients -- would have to absorb the cost.

"All of our contracts say the patient cannot be billed if our review and assessment says that it was not medically appropriate," Nussbaum said.

WellPoint put 11 items on its initial quality checklist, but the insurer may expand that as the program develops. It tied the mistakes to reimbursement to ensure the problems receive proper attention from hospital administrators.

"We just want to make sure this gets the absolute full attention it deserves because at the end of the day peoples lives are at risk," Nussbaum said.

Mistakes have already grabbed the attention of hospital executives, according to the American Hospital Association, which represents about 5,000 U.S. hospitals. WellPoint's program seems to parallel what the association has already asked hospitals to do, said Nancy Foster, its vice president for quality and patient safety.

Shares of Wellpoint fell 43 cents to $45.98 Wednesday.
Source: BusinessWeek

04.02.2008.