WellCare Health employee guilty of $20M Medicaid fraud

Anne Zieger — Tue, 07 Oct 2008 02:54:28 -0400

The U.S. Department of Justice has revealed that a former employee of WellCare Health Plans has pleaded guilty to charges that he conspired to fraud the Florida Medicaid program out of more than $20 million. The employee, Gregory West of Tampa, FL, could be sentenced to as many as 10 years in prison a fine of up to $250,000.

West, along with unnamed co-conspirators, admitted to having taken part in a scheme to defraud Florida's Medicaid agency, the Agency for Health Care Administration. West and his partners inflated expenses submitted to the AHCA from 2002 to 2006 as a means of cutting down the amount WellCare had to pay back the state. As the contract was written, WellCare was only allowed to keep 20 percent of premiums to pay administrative expenses, so if it cost the company less than 80 percent to provide member services, it was supposed to pay that excess back to the state.

West's guilty plea came two months after state and federal officials raided WellCare's Tampa headquarters. WellCare, which offers managed care services for government health programs, later underwent a series of dramatic changes, including seeing its stock fall precipitously, its entire executive team replaced, financial information restated back to 2004 and a $32.5 million refund to the state of Florida under its Medicaid contract.

To learn more about West's plea:
- read this Tampa Bay Business Journal article

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Michigan mulls new $160M proton beam cancer centers

Abby Christopher — Tue, 24 Jun 2008 13:23:42 -0400

While some communities wonder if they can afford to build just one proton beam cancer center, providers have proposed roughly five such centers in Michigan. Final rulings on state certificate of need applications later this year will determine just how many centers may be approved.

Two rival providers--William Beaumont Hospitals and a cancer treatment consortium established by the University of Michigan--originally planned to jointly fund a single center and applied for a certificate of need to get state approval of the plan. Last week, Michigan Governor Jennifer Granholm changed all that when she vetoed the now former partners' Certificate of Need application that had already won approval from the Michigan CON Commission. In her veto letter to the commission, Granholm stated that a single collaborative approach could violate antitrust laws under the federal Sherman Act and that the U.S. Department of Justice had raised similar concerns.

Each of the former partners plans to re-apply for a separate certificate of need approval. In fact, Beaumont Hospitals has already re-applied, having teamed with Indiana-based ProCure Treatment Centers to build its new for-profit proton beam cancer center. The University of Michigan Health Center's proton beam consortium has only filed a letter of intent, and plans to make a presentation to the state to make its case for the center in early September. The state is expected to rule on the Beaumont application by July 1. Other providers have also submitted applications that the state is expected to rule on by the end of July and the end of September.

State business and labor leaders worry that two or more multi-million dollar cancer treatment centers could drive up health care costs for employers and individuals. Many oncologists, cancer centers, carriers and policymakers around the country also are evaluating the pros and cons of making such high-ticket investments. Proton beam therapy is a relatively new alternative to aggressive cancer treatments such as chemotherapy and more established uses of radiation. Each facility can cost as much as $200 million.

For more information:
- check out the article at Crain's Detroit Business