WellPoint Inc. Chief Executive Angela Braly is moving to respond to complaints about her company's health-insurance premium increases by adding new layers of oversight to pricing practices.
In a memo sent Wednesday to its 40,000 employees and reviewed by The Wall Street Journal, Ms. Braly said the Indianapolis health insurer will implement third-party reviews of its 2010 rate filings and investigate why its actuaries did not find miscalculations uncovered last week by the California Department of Insurance.
"We have to be sure that the processes we use and the work we produce are reliable and accurate, so they do not in any way distract from the real challenges facing us—the unrelenting increase in the cost of health care in America," Ms. Braly wrote.
The move comes a day after Health and Human Services Secretary Kathleen Sebelius asked governors and regulators in 50 states to investigate whether WellPoint's rate filings included similar errors to those found in California. Last week, the WellPoint unit in California withdrew its request to increase rates for individual plans by up to 39% after actuaries hired by the state found several mistakes, such as double counting the price effect of policyholders as they age.
Problems for WellPoint continued to mount on Wednesday. California Insurance Commissioner Steve Poizner, a Republican candidate for governor, said he is investigating the validity of claims data used by WellPoint's Anthem Blue Cross unit. The probe includes a review of claims, premiums databases and information-system processes and controls, the department said.
"We're not convinced their data-collection process is right and their data is in the right spot," said Mr. Poizner.
A WellPoint spokeswoman said the company is looking into Mr. Poizner's claims and will continue to cooperate with the state department. The spokeswoman said the memo was intended to explain to employees the company's plan of action.
In her memo, Ms. Braly pledged to work more closely with the California Insurance Department and its outside actuary, Axene Health Partners LLC. She says she will ask Mr. Poizner to allow Axene to help Anthem update its filing.
Ms. Braly also said that the company will change its internal peer review process to include more actuaries in addition to just those who work in the individual business. She is instructing presidents of her state plans to reach out to state regulators to answer questions they may have about the company's filings.
At the California Department of Insurance, a spokesman hadn't seen the memo, but said that the regulator encourages companies to take necessary steps to ensure accuracy of rate filings and looks forward to a formal request from Anthem about using Axene's services. "Allowing it may eliminate their independence and create potential conflicts of interest," the spokesman said in a statement.
Officials at Axene didn't immediately return a request for comment.
An HHS spokeswoman declined to comment on the memo, saying she had not seen it. "We hope WellPoint is finally taking this matter seriously," said the spokeswoman. "We'll be watching their actions closely."sentiment
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