WellCare President and CEO Schiesser to resign

Health insurer WellCare Health Plans Inc. said Monday that Heath Schiesser, who was promoted to president and CEO during a leadership shakeup in January 2008, will resign once a successor is found.

WellCare said Schiesser announced his intentions on Friday, and that he plans to resign as both an officer and a director. The company said it has started looking for a new president and CEO, but has nominated Schiesser to a new term on its board.

Shares of WellCare fell 73 cents, or 3.8 percent, to $18.51 in afternoon trading.

Schiesser, 41, replaced Todd Farha as president and CEO in January 2008, the same day the company's chief financial officer and general counsel both resigned. Three months earlier, WellCare's headquarters had been raided by the FBI and Florida's attorney general's Medicaid Fraud Control Unit.

In May, WellCare avoided prosecution for health care fraud by agreeing to pay $80 million in restitution. The company was charged with defrauding the Florida Medicaid program and Florida Health Kids Corporation of $40 million. WellCare has set aside $50 million more for other possible settlements.

Before his appointment, Schiesser was senior vice president for marketing and sales, and president of WellCare Prescription Insurance.

In a note to clients, Credit Suisse analyst Gregory Nersessian said WellCare is still being monitored by the federal government, and faces major challenges as it enters a Hawaiian contract, waits for Medicare sanctions to end, and prepares to end its participation in a Florida Medicaid reform pilot program and end its private-fee-for-service plans.

"We consider this to be an inopportune time for more management upheaval," Nersessian said, noting that WellCare announced the departure of its general counsel and secretary, Thomas O'Neill, in early June.