Florida's largest Medicaid managed care provider will be allowed to avoid criminal prosecution for health care fraud if it pays $80 million in restitution, under an agreement announced Tuesday by the U.S. Attorney's Office.
Tampa-based WellCare Health Plans Inc. has been charged with engaging in an elaborate scheme to defraud the Florida Medicaid program and Florida Healthy Kids Corporation of about $40 million.
U.S. Attorney A. Brian Albritton said he is confident prosecutors could convict WellCare, but that doing so would likely put the insurer out of business, harming Floridians who depend on the company for health care. He also said authorities did not want to put hundreds of innocent employees out of work and hurt the company's shareholders.
"In charging WellCare, we have sought to punish the company for its misconduct," Albritton said at a news conference in Tampa. "But we have, at the same time, tried to avoid crushing it."
The deferred prosecution agreement requires WellCare to consent to the civil forfeiture of $40 million and pay an additional $40 million in restitution to Florida Medicaid and Healthy Kids, which provides affordable health insurance for children whose parents can't afford private coverage and don't qualify for Medicaid.
WellCare must also retain an independent monitor, selected by the U.S. Attorney's Office, to review the company's business operations and report on its compliance with federal and state health care regulations; cooperate with the government's ongoing investigation; and develop adequate internal controls to prevent any future abuse.
"We are pleased to have reached this resolution," Heath Schiesser, WellCare's president and CEO, said in a statement.
The company said it will pay $25 million within five business days of the filing, and has already paid another $35.2 million. The remaining $19.8 million will be paid by year's end.
The agreement doesn't necessarily exempt WellCare executives and employees responsible for the fraud, however. The government's investigation is ongoing. Albritton would not discuss any further details.
WellCare, which was the largest provider in Florida's Medicaid pilot program, halted coverage in Broward and Duval counties on May 1 after saying recent state budget cuts make it economically unfeasible to offer quality health care.
WellCare manages care for nearly 2.4 million people on government-sponsored health plans in Florida, Connecticut, Georgia, Hawaii, Illinois, Missouri, New York and Ohio. Florida's Medicaid reforms are being closely monitored by other states seeking to reduce their own health care costs.
WellCare has struggled since a 2007 raid on its Tampa headquarters, in which agents seized Blackberrys, files and computers from corporate, marketing and human resources offices. Days later, Connecticut Attorney General Richard Blumenthal said he was also investigating a WellCare affiliate after receiving a whistleblower complaint of allegedly hidden and misreported profits.
WellCare employee Gregory West has pleaded guilty in a scheme to defraud the state of more than $20 million.
In a Jan. 26 filing with the Securities and Exchange Commission, Wellcare said it was in default and subject to penalty on a $152.8 million loan due in May. It has also expressed concern in recent months about Medicare premiums failing to keep up with rising health care costs.
Albritton said deferred prosecution agreements are frequently used by the U.S. Department of Justice for cases involving corporate health care fraud and other corporate criminal conduct.
"This is in fact one of the largest health care fraud cases in the United States," he said.
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Associated Press Writer Kelli Kennedy in Miami contributed to this report.
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