Standard & Poor's raises WellCare outlook

Standard & Poor's Ratings Service on Thursday raised its outlook on WellCare Health Plans Inc. to "positive" from "negative," saying the health insurer has paid back its debts and made some progress into concluding government investigations.

The Tampa, Fla., Medicaid provider has improved its financial flexibility, Standard & Poor's said. It noted that WellCare agreed earlier this month to pay $80 million to resolve an investigation into allegations it tried to defraud two Florida health programs, and is setting aside another $50 million for other potential settlements, as it is negotiating with the Securities and Exchange Commission.

In October 2007, the FBI and Florida's attorney general's Medicaid Fraud Control Unit raided the company's headquarters. WellCare allegedly defrauded the Florida Medicaid and Healthy Kids programs, and is avoiding prosecution due to the May 5 agreement.

WellCare has already made most of its payments, and plans to make a final $19.8 million payment by the end of this year.

The agency maintained a "B-" rating on WellCare, which is six notches below investment grade and into "Junk" status. In afternoon trading, WellCare shares slipped 44 cents, or 2.3 percent, to $18.95.