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updated: 8/15/2012 4:26 PM

Low marks for WellPoint in hospital survey

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Bloomberg News

WellPoint Inc., the health insurer that's lost 18 percent of its market value over two months, is the least popular carrier among hospital executives who have to negotiate with the company, an industry survey shows.

The second-biggest U.S. health plan was ranked last among the six largest for-profit insurers, undercut by low ratings for rejecting claims and fixing wrongly-denied bills. The poll of 403 executives was conducted by ReviveHealth, a communications company that works with hospitals. The showing for Indianapolis- based WellPoint was its worst in the survey's six years.

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Angela Braly, WellPoint's chief executive officer since 2007, has faced investors' ire since cutting her 2012 profit forecast last month and posting earnings that missed analysts' estimates for the second time this year. The insurer, which owns Blue Cross plans in 14 states, has tried to improve earnings by cutting costs, setting up more confrontations with hospitals, said Brandon Edwards, ReviveHealth's president.

"Hospitals say WellPoint is just exceptionally difficult to deal with," Edwards said in a telephone interview from ReviveHealth's Nashville, Tennessee, headquarters. "Even though they're only present in about one-third of the states, they were still rated the absolute worst overall."

WellPoint was viewed favorably by 27 percent of the executives polled, ReviveHealth said in a statement. Cigna Corp., based in Bloomfield, Connecticut, had the best reputation, at 71 percent, while Minnetonka, Minnesota-based UnitedHealth Group Inc., the only carrier bigger than WellPoint, improved for the second straight year at 44 percent.

Survey Questions

Kristin Binns, a WellPoint spokeswoman,and Phil Mann, of Cigna, didn't immediately respond to messages seeking comment.

WellPoint rose 1.6 percent to $57.80 at the close of New York trading, while UnitedHealth also gained 1.6 percent to $52.82. Cigna increased less than 1 percent to $43.86.

The survey asked executives to assess insurers on more than a dozen topics, including image and reputation, contract negotiations and claims-processing.

WellPoint's tough stance may reflect the dominance of its Blue Cross plans in states where it operates, said Jason Gurda, a Leerink Swann & Co. analyst in New York.

"They tend to have a lot of market share and having a lot of market share means you don't have to be as generous as everybody else," Gurda said in a telephone interview.

UnitedHealth scored worse than WellPoint in more individual categories, including honesty and candor, timeliness and responsiveness and processing and paying claims, the survey shows. Executives credited the insurer for taking steps to improve, Edwards said.

UnitedHealth Movement

"Most of our hospitals would tell us, 'United's still not great, but we see movement,'" he said.

The American Medical Association said in June that UnitedHealth was the most accurate carrier for handling claims, according to its annual insurer report card, said Daryl Richard, a spokesman for the company's UnitedHealthcare unit.

"We continue to strengthen our relationships with care providers across the country," he said in an e-mail. "Productive, collaborative relationships between physicians and companies like UnitedHealthcare are important if we are going to make progress together."

The insurer has more than 500 employees in its Provider Relations group assigned to work with doctors and hospitals and it's restructured call center operations to better communicate with providers, Richard said.

The survey was sponsored by The Godbey Group, an Irving, Texas-based company that assists hospitals with managed-care negotiations, and Monigle Associates, a Denver-based marketing firm that works with health-care companies.

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