Yawn. Another major fraud in the healthcare industry. No, not Columbia/HCA, Gov. Rick Scott’s former hospital company which he led, that ended up settling civil and criminal charges and paying over $1.7 billion in fines to the government for defrauding Medicare. This time, it’s WellCare Health Plans, headquartered in Tampa, defrauding Medicaid, the U.S. Securities and Exchange Commission (SEC) alleges.
The SEC this week charged three former WellCare Health Plans executives with taking part in a “fraudulent scheme” to avoid refunding about $41 million to the Florida Agency for Health Care Administration and to the Florida Healthy Kids Corp.
The SEC complaint, filed in federal court in Tampa, accuses former WellCare Chief Executive Officer Todd Farha, former Chief Financial Officer Paul Behrens and former General Counsel Thaddeus Bereday of carrying out the scheme between 2003 and 2007.
FBI agents raided WellCare’s Tampa headquarters in 2007, after an investigation that included using an undercover informant. The SEC complaint deals with contracts that WellCare subsidiaries had to provide services to Medicaid beneficiaries and to children enrolled in the Healthy Kids program.
It alleges, in part, that WellCare deceived the state about how much money the company spent on behavioral-health services for Medicaid beneficiaries and did not refund a contractually required $35 million to AHCA.
It also alleges that WellCare deceived Healthy Kids to avoid refunding $6 million.
The SEC contends that the fraud led to WellCare misstating its net income and other financial results. Also, the 56-page SEC complaint accuses the executives of profiting from the sale of company shares while knowing about the fraud.
