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WellCare curried political favor

MIAMI — While Florida politicians were considering a vast overhaul of the state's troubled Medicaid system, a Tampa company that administered care for a half-million poor and needy residents was busy lining their pockets with campaign donations.

WellCare Health Plans Inc., its subsidiaries and executives spent $2.4 million on political contributions in the 2004 and 2006 elections, an analysis of campaign records by the Associated Press shows. More than 95 percent of it went to Republicans, who pushed forward a nationally watched plan that funnels more state and federal Medicaid spending than ever through private companies like WellCare, which profit most by providing the least care.

Meanwhile, WellCare acknowledges it was cheating Florida out of tens of millions in overpayments and is under investigation for suspected fraud and unfair business practices by a cadre of state and federal agencies.

WellCare manages care for nearly 2.4 million people on government-sponsored health plans in Florida, Connecticut, Georgia, Hawaii, Illinois, Missouri, New York and Ohio. Florida's Medicaid reforms are being monitored by other states seeking to alleviate their own health care costs.

WellCare gave $100,000 to the Republican Party of Florida on Dec. 6, 2005 — a day after the Legislature convened specifically to consider the Medicaid proposals, and days before they passed. The company spent seven times as much on lobbying than its top two competitors combined, skirting state laws meant to cap candidate donations at $500 per person or company by writing checks under nearly 30 different business names.

Half of WellCare's contributions — $1.2 million — went to the Republican Party of Florida. State law provides no limit on party donations, and there is virtually no way to tell where the funds go after that.

WellCare's offices were raided by the FBI, Florida regulators and numerous other agencies in October 2007. In a now-unsealed plea agreement, prosecutors and a former employee said the company inflated expenditures by submitting fake documents to the state.

WellCare agreed in August to repay $35 million, its best estimate of the total wrongly kept from 2002-2006. After the raid, the company restated its quarterly and annual profits — driving down net income by $32 million — and saw its top three executives resign.

No criminal charges have been announced against WellCare or its officials but investigations by Florida, Connecticut and federal prosecutors are ongoing. The Securities and Exchange Commission is leading an informal review, and WellCare faces numerous shareholder lawsuits and sealed whistle-blower complaints, the company's SEC filings say.

WellCare has since halted all Florida campaign contributions.

WellCare curried political favor 02/15/09 [Last modified: Sunday, February 15, 2009 10:44pm]
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