Medicare suspends WellCare plan enrollment
Tampa's WellCare Health Plans Inc., already reeling from an ongoing federal investigation since a fall 2007 FBI raid, is taking it on the chin again -- this time by the Centers for Medicare & Medicaid Services. Abby Block, Medicare’s chief of private plans, said the company used forged enrollment applications and provided misleading or inaccurate information to potential customers of its Medicare-backed drug and medical plans.
As a result, WellCare was ordered by the government to stop enrolling new customers in such Medicare-backed plans. WellCare was notified Thursday of its suspension in a letter sent by the Centers for Medicare & Medicaid Services, according to the agency. As the 5-day stock chart shows, WellCare shares plunged nearly 30 percent on the news. Shares traded just under $11 in Friday afternoon trading, down more than 22 percent on the day.
“WellCare’s performance was substandard in numerous areas, and WellCare was one of the overall worst performers among all plans,” said Block in the letter. “WellCare’s complaints are three times the national average.”
WellCare responded saying it takes CMS’ concerns seriously. Said WellCare CEO Heath Schiesser:
"We are committed to complying fully with CMS requirements and serving the needs of our members.”
According to WellCare's public statement, the company is "making significant efforts to improve operational effectiveness to address the issues identified by both CMS and the company’s own monitoring." WellCare said it will hire "independent third parties to ensure" that its operations and marketing activities comply with government requirements.
-- Robert Trigaux, Times Business Columnist