The government agency said in a letter to Krista Bowers, WellPoint's president for its senior business and consumer business marketing, “CMS is imposing these intermediate sanctions immediately because it has determined that WellPoint's conduct poses a serious threat to the health and safety of Medicare beneficiaries".
The violations stem from problems with WellPoint's computer systems, according to CMS, which cited a "serious, pervasive problem" affecting the company's Medicare plans.
According to government, WellPoint failed to provide essential prescription drugs to the Medicare beneficiaries suffering from heart disease, seizures and asthma. The company is also accused of overcharging the drugs due to some computer problems.
Due to this sanction, the shares of WellPoint, the parent company of Woodland Hills-based Anthem Blue Cross of California and the state's largest for-profit health insurer, fell Tuesday by $3.91, or 9.55 percent, to $37.05 in early trading.
The company said, “We are working closely with CMS, and marketing and enrollment of the company's Medicare Advantage and Medicare Part D products have been suspended until remediation efforts have been completed.”
The company further said, “CMS' actions do not impact members currently enrolled in our Medicare products. We take member access to benefits and member safety very seriously and we have put processes in place to help ensure that our members get their medications and are being billed correctly.”
UBS analyst Justin Lake said the "rather harsh" CMS letter "clearly spells out a troubling service pattern to Medicare patients." Lake wrote in a research note, “These claims are certain to bring into question potential for broader CMS sanctions down the road."
We are here to answer your questions and concerns, so please call us at 1.800.289.8376 or email me at Bob@MedicareOptions.info.
