this is absolutely not the case that wellpoint. i want to assure the committee that there is no wellpoint policy to factor in the number of decisions or the dollar amount of unpaid claims and an evaluation of employee performance or in calculating the employee's salary or bonuses. in response to policymaker interest and in acting consumer protections related to rescission wellpoint is proposing a set of regulations with new consumer protections. i about lion decent my written testimony to the subcommittee. in addition the health insurance industry has proposed a set of comprehensive interrelated reforms to the individual health insurance market as a whole. the centerpiece of this proposal is the elimination of underwriting combined with an effective enforceable personal coverage requirements. in other words insurers sill to all applicants regardless of preexisting conditions as long as everyone enters the risk pool by purchasing in maintaining coverage. this would render the practice of recission unnecessary. our proposals are exam

i reiterate my statement that wellpoint does not have a policy. it is not been our policy to systematically reward associates for performing rescissions, for tracking the number of rescission or the dollar amount. >> begin both of those employees receive somewhere between 600 to about 6,000 i think the range was? >> my understanding is that those associates received within the average compensation that all wellpoint associates received for that given time period. >> oh keizo ury juris-- okay. with their profits i guess you would give bonuses. that concludes our hearing for today. the committee rules provide members of ten days to submit additional questions for the record. i have already had the record book submitted for the record. we will redact with anything that relates to law enforcement said that. that concludes our hearing. i thank gore witnesses for coming and that concludes this subcommittee hearing. >> thank you. [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2009] >> on toesday

dewalt three view-- >> wellpoint insurers one in nine americans. the beth majority are covered under erisa plans. >> mr. collins. >> yes sir, the majority of our membership are in group insurance plans which are covered under erisa. >> mr. him. >> the majority are individuals however we have some customers under erisa. >> does the same problem retained in the rest of the marketplace as in this private insurance marketplace, ms. pollitz you indicated that you think it does. >> there is recision-- >> i am sorry, i can't hear you. >> there is recision in the small group market. it operates a little differently because it is a guaranteed but a similar process, if they claim is submitted during the week period, it is largely the eligibility of the members of the group and the family members of the group that will be reinvestigated to see if there is any way that the people who made the claim should have been on the policy in the first place. >> but the state period is like two years, do not apply because it is the nearest the plan? >> your are much tigh

according to documents obtained by the committee, one wellpoint officials was awarded it risk for a five, for exceptional performance. based on having said the company nearly $10 million through recessions. these practices revealed that when an insurance company receives a claim for inexpensive, life-saving treatment, some of them will look for a way, any way to avoid having to pay for it. this is eerily similar to what we found last year in an investigation of long-term care health insurance policies where unscrupulous sales people would sell policies to seniors and then change or revoke the policies once literally was locked into a plan and making payments. the company to engage in these recission practices are new that they are entirely legal and to an extent they are. but that goes against the whole point of insurance, when times are good the insurance company is happy to sign you up and take your money in the form of premiums but when times are bad and you're afflicted with cancer or some other life-threatening disease it is supposed to honor its commitments and stand with you in yo

you gave us wellpoint provided a list of conditions that automatically lead to an investigation post underwriting, okay? and for wellpoint, the list of conditions that trigger a recession investigation includes diseases ranging from heart disease and high blood pressure to diabetes and even pregnancy, so what did these conditions have in common that would cause you to investigate patience with these conditions for a possible recession? you have 1400 different conditions which would trigger, according to your documents, trigger an investigation. >> chairman and investigation does not mean that rescission actually occurs. for example in 2008, there were over 16,000 fustigation and 92% of this were dismissed. in no action was taken. >> right but what you have 14 different investigations to trigger an investigation? what is the common theme that would trigger an investigation? >> i would say there is no common theme other then these are conditions that have the applicants disclosed their knowledge of the condition that the time of initial underwriting. we may have taken a different under

wellpointe, in 2009, cms barred wellpointe from participating in medicare part d and medicare advantage stating they have demonstrated a longstanding and persistent failure to comply with the requirements of the proper dispensation of the medicare program. aetna in 2003, they agreed to settle a class action suit brought by physicians by paying a $470 million in overhauling business practices that the doctors say have shortchanged patient care. humana in 2000 paid a fine for overcharging government. and sigma paid $24.5 million for allegations of medicare fraud. all right. that is just some of what the insurance companies are doing, and them you have private hospital chains. i think that many people here are familiar with that in fact that in 2000, the hospital corporation of america agreed to pay $745 million. $745 million to settle civil charges that it systematically defrauded medicare/medicaid and other federally-funded health care programs. later that year, hca agreed to pay criminal charges and fines of $90 million. and finally in 2003, hca agreed to pay $631 million more in civil

wellpoint, the 2009 cms board wellpoint from participating in medicare part d and medicare advantage stating they've demonstrated a longstanding persistent failure to comply with cms requirements for proper administration of medicare advantage prescription drug program. aetna and 2003, agreed to settle a class-action suit brought by physicians by paying $470 million overhauling business practices that doctors say were shortchanged patient care. amana in 2000 he managed a 14.5 million to settle federal charges of overcharging government health programs. sigma, and 20 of repaid $24.5 million to settle allegations of medicare fraud at a hospital that it owns. that is some of what insurance companies do. then you've got hospital change. many people here are familiar with. that in fact in 2000, the hospital corporation of america agreed to pay $745 million. 745 million to settle civil charges that it systematically defrauded. medicare, medicaid and other federally funded health care programs. later that year they agreed to pay criminal fines of around $95 million. finally, and 2003, hca a

for wellpoint this was 742 case files. to date the committee has received more than 650 of these case files. my staff had the opportunity to review several of these files, including working all weekend. in some there is a documentation or evidence that the insured intentionally withheld pertinent medical information that would have affected their coverage. in others it's unclear whether the applicant was even aware of the condition or notation cited by an investigator in an old medical chart as evidence to rescind. today three individual policyholders will explain their stories and illustrate how they were unaware of conditions, symptoms or other possible diagnoses that were written in a medical chart that never expressed to the patient. you have to ask yourself, can the person make a material omission or a misstatement if he or she was not aware of a fact. i don't think so. but if i'm wrong, i want the companies to explain it to me. 2008, 2009, these companies entered into settlement agreements with rescinded policyholder

sassi who is the president and chief executive officer of wellpoint inc. and ms. karen pollitz who is the research professor georgetown university health policy institute. welcome to all of our witnesses. is the policy of the subcommittee to take your testimony under oath. please bid bison of the right and the rules of the house to be it buys the council during your testimony. kiewit to be represented by counsel during your testimony? mr. hamm you would? any time during the questions if you want to get advice from counsel, just let us know and we will allow the. council cannot testify but the cannon fisa. mr. collins? mr. sassi? ms. pollitz? so then let me have you raise your right hand and take the oath. do you swear or affirm the testimony you are about to give is the truth, the whole truth and nothing but the truth in the matter pending before this committee? let the record reflect that the witnesses replied in the affirmative. they are now under the beginning with their opening statement. you have five minutes for an opening statement in you may submit a longe

humana, wellpoint they refuse to do away with rescission. we are going to regulate the private companies and the public plan will meet the same regulations so when you go to the exchange if for some reason you don't have insurance, through the benefit of c-span who inform the public so well, you'll have the choice to go into the exchange and pick a plan. pick a private plan if you like it or pick a public plan. i'm sure there will be several private plans. >> i'd like to follow up on the public plan question a little bit this gets talked about a lot, as you know, republicans seem pretty firmly lined up against it. they've been vocal about how they can't imagine voting for something with it in there. but there's also concern about opposition to something resembling what is in the draft bill you and your clearing -- colleagues put out on friday, are you confident at the end of this process that your bill will attract a majority or really all of house democrats in spite of the concerns expressed by some of the more conservative members of the p