5 Things to Know About the Alleged WellCare Medicaid Fraud Scheme

Tampa, Fla.-based WellCare operates HMOs in several states, providing health and prescription drug plans to 3.5 million members through Medicare and Medicaid. On May 19, three top executives from the company were sentenced for their involvement in a scheme to defraud Florida's Medicaid program.

Here are five things to know about the alleged WellCare Medicaid fraud scheme:

1. StayWell and Healthease, two of WellCare's HMOs operating in Florida, have contracts with the Agency of Health Care Administration, the agency that administers Florida's Medicaid program, to provide Medicaid recipients with many healthcare services. According to a Florida statute, all Florida managed-care plans, such as WellCare, that spend less than 80 percent of premiums on patient care are required to return the difference to the Agency of Health Care Administration.

2. In May 2009, federal charges were brought against WellCare alleging the company had submitted annual reports containing inflated expenditure information to the Florida Medicaid program to reduce its payback obligation. As part of a deferred prosecution agreement, WellCare was required to pay $40 million in restitution, forfeit another $40 million to the government and cooperate with the government's criminal investigation concerning the fraud scheme. For complying with all terms of the agreement, all charges were dropped against the company.  

3. After the charges were dismissed against WellCare, HHS' OIG, the Federal Bureau of Investigation and the Florida Medicaid Fraud Control Unit continued their criminal investigation of three WellCare executives. The investigation revealed the executives had kept $40 million that should have been spent on patient care or otherwise returned to the Florida Medicaid program.

4. In June 2013, a federal jury convicted the three executives for their involvement in the Medicaid fraud scheme. WellCare's former CEO, Todd Farha was convicted of two counts of healthcare fraud. On May 19, he was sentenced to three years in prison. Mr. Farha also received a $50,000 fine that was ordered by the court to be paid immediately.

5. WellCare's former CFO, Paul Behrens, was convicted of two counts of healthcare fraud and two counts of making false statements related to healthcare matters. Mr. Behrens received a two year prison term for his involvement. William Kale, WellCare's former vice president, was also convicted of two counts of healthcare fraud, and he was sentenced to one year in prison for his participation in the fraud scheme.

More Articles on Healthcare Fraud:

3 Findings From Recent Medicaid Fraud Control Unit Reviews
$89M Judgment Entered Against Florida Oncologist in False Claims Act Case 
Humana Under Investigation For Allegedly Overcharging Medicare Advantage Program

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