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Medicare Cites WellCare Again

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By CAROL GENTRY, The Tampa Tribune

Published: October 9, 2007

TAMPA - In June, after congressional committees accused WellCare Health Plans of Medicare marketing abuses, the company promised to fix its problems.

It stopped marketing its most problem-plagued plan and announced new customer protections. Todd Farha, chairman and chief executive, promised 'best-in-class compliance practices to protect seniors.'

The repairs are taking longer than planned. Last week, the Centers for Medicare and Medicaid Services released documents that showed WellCare was cited again in August for violating eight provisions of its Medicare contract.

The violations included some of the same sales practices the Tampa company was accused of in April, plus some new ones. For example, the report said the company failed to meet the 60-day deadline on appeals from members who were denied coverage in 40 percent of the cases studied.

CMS ordered WellCare to write a 'corrective action plan' for each of the eight violations. Company spokeswoman Amy Knapp said Monday that the company has complied.

'WellCare is confident that it addressed CMS' concerns in its corrective action plans and expects to receive notification from CMS that its plans have been approved,' she wrote in an e-mail.

Knapp declined to show them to The Tampa Tribune. 'WellCare considers the corrective action plans private documents between WellCare and CMS and is not prepared to make them public,' she said.

However, she said, 'WellCare takes its responsibility to protect its Medicare beneficiaries very seriously, and continues to make its oversight program a top priority.'

Other Companies Also Violate Contract

WellCare has plenty of company on the Internet page that lists violations and requirements for correction. Humana of Louisville, Ky., the largest Medicare contractor in Florida, must write such plans for more than 300 violations.

The Medicare Rights Center, which brought complaints of marketing abuses by private plans to public notice a year ago, said the audit results show why Congress needs to require CMS to do a better job of regulating companies that sell Medicare replacement plans, called Medicare Advantage plans. Such plans, which cover medical and prescription bills, receive billions in taxpayer money and cost the government more than traditional Medicare.

'Stamping out these marketing abuses is akin to capturing smoke,' said the center's president, Robert Hayes. 'Once you think you have identified a problem and are taking steps to correct it, similar problems pop up right next door.'

The specifics of August's audit for WellCare have not yet been posted on Medicare's Web site. However, the gist of the violations is contained in massive data files at the site.

They show WellCare's problems concerned:

•Difficulty tracking the status of members, especially those who resigned from the plan soon after signing up. This can result in misinformation in the CMS computers, leading beneficiaries to have legitimate claims rejected for payment.

•Gaps in the training and contracts of agents that left them unaware of many Medicare requirements.

•Failure to follow the rules on denying coverage of treatment or payment of claims.

Starting in November, WellCare must file monthly reports to CMS on member complaints, their disposition, and its plan for preventing similar complaints.

WellCare must also submit monthly reports that show it has called new members to verify that they did, indeed, intend to enroll in a Medicare Advantage plan.

Problems Led To Halt In Sales

August's audit was scheduled and expected, unlike the one in April, which was triggered by complaints about sales practices in WellCare's private fee-for-service plans. That audit reported that Medicare beneficiaries were being signed up for replacement plans after being given misleading or incomplete information.

The abuses were most common among independent agents, who received little oversight from the insurers, according to CMS. Some were accused of fraud; in the most notorious case, detailed at a congressional hearing, an agent representing WellCare enrolled beneficiaries who were dead.

Consumer groups said the temptation was great to mislead beneficiaries into leaving traditional Medicare and enrolling in Medicare Advantage plans because of lucrative commissions for sales agents. Companies in particular wanted to boost enrollment in private fee-for-service plans, which have no dedicated networks of physicians, because their Medicare payments are highest.

After April's audit, WellCare released a list of steps it would take to protect beneficiaries, including calls to members to verify enrollment and a 'secret shopper' program to monitor marketing claims.

WellCare, Humana and five other companies voluntarily stopped selling the private fee-for-service plans in June after the congressional hearings. CMS recently permitted all seven to resume marketing, saying they were making progress, while keeping the cases open for oversight.

Marketing for 2008 Medicare drug and Advantage plans began Oct. 1. Enrollment begins Nov. 15.

To see the CMS corrective action plans, go to www.cms.hhs.gov/MCRAdvPartDEnrolData/CAP/.

Reporter Carol Gentry can be reached at cgentry@tampatrib.com or (813) 259-7624.

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