WellCare Agrees To Pay $35.2M In Medicaid Fraud Investigation

Main Category: Medicare / Medicaid / SCHIP
Also Included In: Health Insurance / Medical Insurance;  Litigation / Medical Malpractice
Article Date: 20 Aug 2008 - 5:00 PDT

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WellCare has agreed to pay $35.2 million as part of a Medicaid fraud investigation, but the payment does not settle nor limit the investigation, the health insurer wrote in a filing with the Securities and Exchange Commission on Monday, the St. Petersburg Times reports (St. Petersburg Times, 8/18).

Federal authorities raided WellCare's Tampa Bay, Fla., headquarters on Oct. 24, 2007, to search for records of "any monetary overpayments," according to the search warrant. WellCare, which provides Medicare and Medicaid managed care plans to about 2.3 million beneficiaries nationwide, in 2006 received nearly $4 billion in revenue from government sources.

Federal authorities during the raid seized thousands of documents, copied data from dozens of hard drives and took several laptops, including one used by company CEO Todd Farha. One day after the raid, a former WellCare fraud investigator filed a sealed whistle-blower lawsuit in Tallahassee, Fla. (Kaiser Daily Health Policy Report, 11/20/07).

The payment includes $24.5 million in estimated Medicaid repayments related to "behavioral health" claims from 2002 to 2006. The claims were filed with two WellCare subsidiaries, WellCare of Florida and HealthEase of Florida. The remaining $10.7 million will be put in escrow while federal investigators continue the probe.

The payment does not prevent the federal government or the state of Florida from making additional claims in their continuing investigations. WellCare wrote in the filing, "We do not know whether other areas of the investigations might lead to fines, penalties, operating restrictions or disqualifications, or other material adverse impaction on the company or the company's previously issued financial statements" (St. Petersburg Times, 8/18).

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