WellCare Health Plans in Tampa, Fla., has reached a preliminary deal with the civil divisions of the U.S. Department of Justice and the U.S. Attorney's Offices for the Middle District of Florida and Connecticut to settle False Claims Act allegations of accounting fraud to a Securities and Exchange Commission (SEC) filing, reports Health News Florida. The price tag to end the investigations that have been haunting the Medicare and Medicaid health insurer since October 2007: $137.5 million.
This isn't WellCare's first settlement. Among others made with a variety of federal and state regulators, the insurer previously paid $80 million to settle federal and state criminal fraud investigations. The new $137.5 million settlement is in addition to the prior settlement, said WellCare spokeswoman Amy Knapp.
The now-unsealed whistleblower complaint that led to this current federal investigation accuses WellCare of stealing $400 million to $600 million from Medicare and several Medicaid programs. The complaint alleges that WellCare engaged in cherry-picking to make sure sick newborns and terminally ill patients weren't members, as well as moving money between accounts to give the impression that patient treatment costs were substantially higher than they actually were. Collins Stewart analyst Brian Wright maintained a "Buy" rating on the company, reports Bloomberg Businessweek.