[Tampa, FL] Managed health care services provider WellCare is again in the news for “allegedly” filing false Medicaid claims, lining their accounts with taxpayer funds, market abuses, and other unlawful practices.

Yesterday, United States Attorney Robert E. O’Neill announced that settlements had been reached with Tampa-based WellCare Health Plans, Inc. over four lawsuits that alleged violations of the federal False Claims Act by whistleblowers.

Note that it says alleged. The latest deal keeps WellCare from admitting guilt in any way, shape or form as a result of these lawsuit settlements.

“This settlement should serve as notice to those defrauding state and federal healthcare programs that, in addition to appropriate criminal prosecutions, we will utilize civil suits to root out their conduct and recover their ill-gotten gains,” said O’Neill.

Those lawsuits alleged – there it is again – that WellCare “engaged in a number of schemes to submit false claims to Medicare and various Medicaid programs.” The government says that WellCare …

1. falsely inflated the amount it claimed to be spending on medical care in order to avoid returning money to Medicaid and other programs in various states including Florida Medicaid and Florida Healthy Kids (Florida’s CHIP program)
2. knowingly retained overpayments it had received from Florida Medicaid for infant care
3. falsified data that misrepresented the medical conditions of patients and the treatments they received
4. engaged in certain marketing abuses, including the “cherrypicking” of healthy patients in order to avoid future costs
5. manipulated “grades of service” or other performance metrics regarding its call center
6. operated a sham Special Investigations Unit

WellCare settled a class-action suit back in 2010

For all of that “alleged” corporate malfeasance, WellCare has agreed to pony up a total of $137.5 million to the United States government and nine states (Connecticut, Florida, Georgia, Hawaii, Illinois, Indiana, Missouri, New York, and Ohio).

This is actually a bad deal for taxpayers because it is estimated that WellCare’s alleged fraudulent billing topped $500 million, according to a former employee.

Instead of a lump sum, WellCare will pay off the $137.5 million in installments – plus interest – over a three year period. And guess what? The four whistleblowers will get a huge chunk of that. Former WellCare employee Sean Hellein will get more than $20 million, while the other three will split $4 million and change.

“The monies recovered in restitution and from this settlement agreement will go to the federal and state programs which suffered these losses, while the forfeited funds will go to law enforcement to help fund future investigations,” said O’Neill.

“In an era of decreasing federal and state budgets, and increasing healthcare costs, we must pursue all available civil remedies to recover losses suffered by government healthcare programs,” he said.

Additionally, if WellCare is sold or controlling interest in the company changes hands before they finish paying off the settlement, another $35 million penalty payment will have to be made by the company with some of that going to the whistleblowers as well.

The release also points out that this isn’t WellCare’s first slap on the wrist by the government. On May 5, 2009, WellCare paid out $80 million to head off potential criminal charges for “allegedly” ripping off the Florida Medicaid and Healthy Kids programs.

But the problems at WellCare went much deeper than that. They were systemic, actually.

Five former executives – including the CEO, CFO and general counsel – were indicted in March 2011 for their crooked ways. All are expected to be tried in court early next year. And former analyst Gregory West pleaded guilty to a conspiracy charge and is currently awaiting sentencing.

Apparently, the feds feel like WellCare can’t be trusted (and who can blame them). The troubled health-care firm is on the equivalent of corporate probation for five years, under the watchful eye of the Inspector General‘s office.

By: Mark Christopher/Sunshine Slate

WellCare

[Tampa, FL] A Tampa health-care giant is finally settling up and hoping to move on, after many years of bad press and even-worse realities surrounding Florida Medicare fraud and the just-resolved federal case that ensnared its highest executives.

WellCare Health Plans said Friday it has finalized settlements with federal officials that will lead to it paying $137.5 million in a health-care fraud case. WellCare reached agreement in 2010 with the federal government, but final approval was held up by a whistleblower who had objected.

The whistleblower worked with the Justice Department as part of an undercover operation at WellCare. That operation lasted for 18 months.

The Tampa-based HMO said Friday the whistleblower withdrew his objection, allowing resolution of the case. The case emerged in 2007, when federal agents raided the company‘s headquarters after an investigation that included whistleblower information.

Ann March of last year, five former executives of WellCare Health were indicted on charges of fraud by United States Attorney Robert E. O’Neill for the Middle District of Florida.

According to that indictment, “beginning in July 2003 and continuing until October 24, 2007, the defendants, all former executives of WellCare Health Plans, Inc. … conspired to, and engaged in, a scheme to defraud the Florida Medicaid program by making false and fraudulent statements relating to expenditure information for behavioral health care services.”

Yikes. Listed on that indictment: former Chief Executive Officer Todd S. Farha, former General Counsel Thaddeus M.S. Bereday, former Chief Financial Office Paul L. Behrens, former Vice President of Harmony Behavioral Health (a wholly-owned subsidiary of WellCare) William L. Kale and former Vice President of Medical Economics Peter E. Clay.

Another former WellCare higher-up, former board member Regina Herzlinger, has gone public with her criticism of the company, penning op-eds and basically taking the company where it doesn’t want to go.

Herzlinger points out that WellCare has, “the lowest Medicare quality scores and the most fines and sanctions recently among its peers and, as the chair of the audit committee. I knew just how fragile its accounting system was.”

Nonetheless, the company is trying desperately to put all of this behind them.

“We are pleased that these matters are fully resolved,” Alec Cunningham, WellCare’s chief executive officer, said in a news release about the $137.5 million fine. “WellCare is a transformed company that is focused on providing quality, cost-effective health care solutions for our members, providers and government customers.”

By: Mark Christopher/Sunshine Slate. Additional reporting by The News Service of Florida

Related reading:

WellCare to Report First Quarter 2012 Results on May 2 (Reuters) WellCare Health Plans, Inc. (NYSE: WCG) will report on Wednesday, May 2, 2012, at 6:30 am Eastern Time its results for the quarter ended March 31, 2012. Beginning at 9:00 am Eastern Time the same day, Alec Cunningham, …