WellCare Health Plans, already under investigation by far too many state and federal agencies, initially reported to the Securities and Exchange Commission that it would be unable to file past quarterly financial reports. However they did file, and shares of the company's stock took a dive on Thursday after those filings revealed that it is in default on a loan facility with a balance of $153.2 million. Shares dropped 54.2 percent, closing at $9.10 after going as low as $6.12 from $19.71 on Wednesday.
This latest news only raises further questions about the company's future viability, which was rocked by scandal since federal agents raided its head in October 2007. It also follows a recent announcement by the U.S. Department of Justice that a former employee pleaded guilty to charges that he conspired to defraud Florida Medicaid out of more than $20 million. Prior to the raid, the company was trading at more than $120 a share.
Third-quarter costs for the WellCare's internal investigation, which found that it overcharged both Florida and Illinois for three healthcare businesses, were around $23 million; year-to-date, the cost of the investigation stands at $87 million.
To learn more about WellCare's financial problems:
- check out this St. Petersburg Times article
- read this Modern Healthcare piece (reg. req.)
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