WellCare agrees to pay $80 million to settle Florida Medicaid, CHIP fraud charges

WellCare Health Plans has agreed to pay $40 million in restitution and $40 million in civil penalties to avoid criminal charges in Florida over alleged fraudulent payment practices to the state's Medicaid and Healthy Kids programs, the Wall Street Journal reports (Fuhrmans, Wall Street Journal, 5/6).

According to the St. Petersburg Times, the $80 million settlement resolves allegations that WellCare from 2002 through 2006 improperly charged the two state health plans more than it actually paid for the care provided to low-income adults and children in the state (Graham/Hundley, St. Petersburg Times, 5/5).

Officials said that WellCare subsidiary Harmony Behavior Health was used to provide cover for the fraudulent practice (Gentry, Health News Florida, 5/5). In addition to the $80 million settlement, WellCare also agreed to accept and acknowledge full responsibility for the deceptive practices. The company also agreed to hire an independent monitor to review its business operations and submit regular reports on the company's compliance with state and federal rules, and to continue to cooperate in the ongoing investigations of former WellCare executives and employees (St. Petersburg Times, 5/5). WellCare already has paid $35 million in restitution. The company will pay an additional $25 million within five days and the remaining $19.5 million by Dec. 31 (Health News Florida, 5/5). U.S. Attorney A. Brian Albritton of Middle District Court of Florida said that if WellCare meets all the terms of the agreement, criminal charges against the company will be dropped.

Albritton said that officials hoped to penalize WellCare but that they "tried to avoid crushing" the company (Wall Street Journal, 5/6). Speaking at a news conference with investigators from HHS, FBI and the Florida Medicaid Fraud Control Unit, Albritton said, "We don't want to put the company out of business but want to punish it," noting that penalizing WellCare too heavily would have affected customers, employees and shareholders who had no involvement in the issue, which he called "one of the largest health care fraud cases in the United States" (St. Petersburg Times, 5/5).