WellCare Health Plans To Pay $80M Settlement in Fraud Case

Another day and another unfortunate fraud case to report.

This time, the culprit was WellCare Health Plans Inc., a Tampa-based managed care company, which has agreed to pay $80M as part of a deferred prosecution agreement with the U.S. Attorney’s office. Basically, WellCare defrauded the Florida Medicaid program and Florida Healthy Kids Corporation by falsely and fraudulently inflating expenditure information from 2002-2006.

According to the Orlando Business Journal article by Margie Manning on the WellCare fraud case:

According to a court filing, WellCare kept for itself money it received from the Florida health care programs that was supposed to be used to provide medical services. The filing said WellCare set up a wholly owned entity, Harmony Behavioral Health Inc., through which it funneled state funds.

WellCare then fraudulently reported money that went to Harmony as expenditures on service, the filing said.

FBI Special Agent in Charge Steven Ibison blamed “corporate greed” in a statement included in the release.

WellCare will avoid a health care fraud conviction as long as it complies with the terms of the deferred prosecution agreement and pays $40M in restitution to the Florida agencies andwellcare fraud: wellcare agrees to pay $80 million to settle fraud case another $40M in civil forfeiture.

The agreement also includes a stipulation that WellCare must “put in place policies and procedures designed to ensure it completely and accurately reports all federal and state health care program information, and it has to continue to develop and operate an effective corporate compliance and governance program.” According to WellCare president and CEO Heath Schiesser, WellCare has developed such a compliance program over the past year.

A recent article by Manning just a week ago detailed Schiesser’s compensation, which exceeded $8.1 million in 2008 despite WellCare’s falling stock price as a result of the government probe.

I suppose it is only fitting that WellCare would settle its fraud case during Corporate Compliance and Ethics Week. Hopefully, as Manning’s article states, the WellCare fraud case will serve as a stern warning to all companies not to steal from Medicaid, or from any other entity either. I think we’ve all seen and had enough of such fraud and greed.

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