Sunday, May 20, 2018
News Roundup

Criminal trial under way in case of former WellCare executives

TAMPA — Nearly two years after WellCare Health Plans agreed to pay $137.5 million to settle accusations that it had overcharged for its Medicaid and Medicare programs, the criminal trial of former top executives at the health care giant is under way in federal district court.

Opening statements are scheduled to start today in the case against four former leaders at Tampa-based WellCare, one of the state's largest operators of Medicaid managed-care plans. The defendants include former chief executive officer Todd S. Farha; former chief financial officer Paul L. Behrens; former vice president William Kale; and former vice president Peter E. Clay.

Former general counsel Thaddeus Bereday was also indicted, but because of an ongoing medical condition will be tried separately.

All five men face charges of conspiracy to commit Medicaid fraud and making false statements.

In 2007, federal agents raided WellCare's headquarters near Tampa after a whistle-blower alleged the company defrauded the government of at least $400 million.

According to the indictment, WellCare took Medicaid money from Florida's Agency for Health Care Administration with the understanding that if it did not use 80 percent of the funds set aside for behavioral health services, the difference was to be returned to the state.

But, prosecutors say, WellCare executives conspired to inflate what they actually spent to reduce the amount they had to return.

Evidence against them includes taped conversations between executives discussing how they could duplicate their bills to the state. The executives also discussed plans to save money by terminating coverage for neonatal babies and terminally ill patients, and throwing parties to reward employees who ousted expensive enrollees, according to whistle-blower documents.

Wellcare later acknowledged that it overcharged Florida and Illinois health programs by about $46.5 million. In 2010, the company agreed to pay $137.5 million to settle civil lawsuits accusing the company of overcharging for its Medicaid and Medicare programs.

That settlement was separate from a deal struck in 2009 on the criminal front. In that case, WellCare agreed to pay $80 million to settle corporate criminal charges.

But the criminal case against former WellCare executives wasn't over. In March 2011, a federal grand jury indicted the five former executives.

Despite the findings of fraud, WellCare never lost its state Medicaid contracts.

Last week, Gov. Rick Scott announced the federal government said it would permit the state to move all of its Medicaid patients into the privately run managed care programs. WellCare, one of the handful of power players in the Medicaid business, is widely expected to secure additional contracts.

Jodie Tillman can be reached at [email protected] or (813) 226-3374.

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