Former WellCare general counsel gets prison sentence for role in Medicaid fraud scheme

Special report: Homegrown fraud task forces promote collaboration
The former general counsel for WellCare has been sentenced to prison time for his role in a Medicaid fraud scheme. (Getty/Devonyu)

The former general counsel for WellCare Health Plans has been sentenced to six months in federal prison for his role in a scheme to defraud Florida's Medicaid program. 

The Department of Justice announced that Thaddeus M.S. Bereday will serve a prison sentence followed by a year of house arrest after he pleaded guilty this summer to making false statements to the Florida Medicaid Program. The court has also ordered him to pay a $50,000 fine. 

WellCare said in a statement that it had fully participated in the investigation and that issues directly related to the company had been resolved, according to an article from Reuters, which added that Bereday's lawyer declined to comment.

Bereday is among five former WellCare executives who were charged in 2011 for their roles in the scheme, which involved forming a separate unit to hide Medicaid reimbursement and falsifying provider payments to circumvent a Florida law that requires insurers to spend at least 80% of Medicaid premiums for behavioral health on beneficiary services. 

RELATED: State agencies lead fight against Medicaid fraud 

The other four executives—former WellCare President and CEO Todd Farha, former Chief Financial Officer Paul Behrens, former Vice President of Clinical Services William Kale and former Vice President of Medical Economics Peter Clay—were found guilty of fraud-related charges in 2013. 

The four executives appealed, arguing that there was not enough evidence to prove they had committed the crimes. But the appeals judges upheld their convictions, noting that they were well aware of the Florida 80/20 law and had even planned to pay Florida’s Agency for Health Care Administration $1 million to avoid suspicion. 

Despite the fraud case that ensnared its top executives, WellCare continues to profit from its Medicaid business. The insurer reported in February that it grew its Medicaid membership to 2.5 million by the end of 2016, a 6.5% increase from the year prior. That growth was driven in part by its acquisition of Care1st Arizona and some of Advicare Corp.'s Medicaid assets.