WellCare Health Plans will pay a $10 million civil penalty plus interest to settle a Securities and Exchange Commission inquiry into misstated financial filings, another step in resolving fraud investigations into its Florida Medicaid programs.
The Tampa managed-care company fraudulently withheld more than $40 million owed to Florida state agencies from at least November 2003 to October 2007, the SEC said Monday.
In July 2008, WellCare's board decided the company should restate earlier financial statements. The changes corrected accounting errors tied to compliance with refund requirements in certain state contracts.
"We are pleased this matter has been resolved," said WellCare general counsel Thomas F. O'Neill III. "From the outset, WellCare has cooperated fully with the SEC, and we are committed to enterprisewide regulatory compliance and ethical business practices.''
The company did not admit guilt or deny the SEC allegations. WellCare also is in talks to resolve investigations by the U.S. Department of Justice's civil division and the U.S. Department of Health and Human Services.
Earlier this month, the company agreed to pay $80 million to avoid conviction on a charge of conspiracy to defraud the Florida Medicaid program and the Florida Healthy Kids Corp., said the U.S. Attorney's Office in Tampa.
By law, WellCare was expected to spend 80 to 85 percent of the money it received on medical services for Medicaid recipients. If it spent less, any money left was supposed to be refunded to the state.
Instead of returning leftover money, WellCare funneled millions of dollars into a subsidiary to disguise actual expenditures. From mid 2002 through 2006, the company fraudulently submitted spending information to the Florida Medicare and Healthy Kids programs.
The first $2.5 million on the latest settlement is due within 30 days. WellCare said it set aside a $50 million reserve in the first quarter of 2009 to cover settling government inquiries, including those by the SEC, Health and Human Services and the Justice Department's civil division.
Steve Huettel can be reached at firstname.lastname@example.org or (813) 226-3384.