Major payors move to end rescission policies, before reform bill deadline
WellPoint and UnitedHealthcare, a UnitedHealth Group company, will implement federal legislation regarding individual market rescissions this week. This policy change precedes the Sept. 23 implementation date, as required in the recently passed health reform legislation.
The standard contained in the federal legislation requires insurers not to rescind policies, except in cases of fraud or intentional misrepresentation of material fact.
UnitedHealthcare, located in Minnetonka, Minn., said it is “aggressively seeking” outside vendors to institute independent, external third party review in the near term. However, WellPoint of Indianapolis noted that in 2008 the payor began offering a binding, external, independent third-party review process for rescission.
WellPoint’s policy change became effective April 27, while UnitedHealthcare’s will become effective May 1.
Secretary of health and Human Services Kathleen Sebelius sent a letter on April 22 urging WellPoint to immediately stop the practice of rescinding coverage for patients who become ill.
After the WellPoint and UnitedHealthcare announcement on Tuesday, Sebelius released a statement: “Last week, when I heard reports of one insurer – WellPoint – targeting breast cancer victims for rescission of their policies, I challenged the company and the rest of the insurance industry to do what they have done with other key insurance reforms in the bill and not wait until September to do the right thing.”
She added: “I was encouraged to learn today that WellPoint has announced it will act to stop rescissions and no longer engage in this practice as of the end of this week. I urge other insurers to also accelerate the Affordable Care Act’s deadline for ending this practice and stop rescinding patients’ policies immediately.”
The standard contained in the federal legislation requires insurers not to rescind policies, except in cases of fraud or intentional misrepresentation of material fact.
UnitedHealthcare, located in Minnetonka, Minn., said it is “aggressively seeking” outside vendors to institute independent, external third party review in the near term. However, WellPoint of Indianapolis noted that in 2008 the payor began offering a binding, external, independent third-party review process for rescission.
WellPoint’s policy change became effective April 27, while UnitedHealthcare’s will become effective May 1.
Secretary of health and Human Services Kathleen Sebelius sent a letter on April 22 urging WellPoint to immediately stop the practice of rescinding coverage for patients who become ill.
After the WellPoint and UnitedHealthcare announcement on Tuesday, Sebelius released a statement: “Last week, when I heard reports of one insurer – WellPoint – targeting breast cancer victims for rescission of their policies, I challenged the company and the rest of the insurance industry to do what they have done with other key insurance reforms in the bill and not wait until September to do the right thing.”
She added: “I was encouraged to learn today that WellPoint has announced it will act to stop rescissions and no longer engage in this practice as of the end of this week. I urge other insurers to also accelerate the Affordable Care Act’s deadline for ending this practice and stop rescinding patients’ policies immediately.”