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Wellcare Health Plans Inc. is not fully paying for its sins. The Tampa-based insurer has been accused of bilking taxpayers of hundreds of millions of dollars by using fraudulent practices that were integral to the company's profit-making. But rather than recover every misappropriated dime and then triple the damages, as the law allows, the Justice Department has announced a preliminary settlement of a paltry $137.5 million to satisfy its whistle-blower claims. If WellCare keeps any of its ill-gotten gains and avoids a significant fine, the message to other health insurers will be loud and clear: fraud pays.

WellCare, which provides managed care services under Medicare and Medicaid, is facing explosive allegations in three whistle-blower lawsuits by employees, laying bare a culture of corruption that seemed to afflict the entire enterprise. Sean Hellein, a former senior financial analyst at WellCare, approached federal authorities with concerns in 2006, then worked undercover with the FBI for 18 months, collecting 1,000 hours of recordings. In one surveillance tape referred to as the "Golden Meeting" by federal prosecutors, Hellein caught top executives in January 2007 discussing how the company would fraudulently double the charges of its behavioral health spending in its accounting to Florida's Medicaid program.

Hellein's complaint also alleges that the company hid profits in an offshore subsidiary, pushed high-cost patients off its rolls and onto government programs, including hundreds of premature babies and terminally ill patients, and kept Medicaid payments that it knew were mistakenly paid. Hellein estimates the fraud cost Florida and six other states between $400 million and $600 million.

In another whistle-blower complaint, Clark Bolton, a former supervisor of special investigations, said the company facilitated overbilling of federal Medicare and state Medicaid programs by refusing to check hospital claims for fraud and not auditing claims from Medicare's private-fee-for-service plans. It was a way to keep doctors and hospitals happy while obtaining higher reimbursements. And a third complainant says the company had employees make bogus calls to its phone lines to make it appear WellCare was being responsive and meeting government customer service standards.

With these accusations swirling and hours of audio and video recordings of company officials seemingly caught in the act, WellCare is playing damage control. Last year the company agreed to pay $80 million to settle a charge of conspiracy to defraud the Florida Medicaid program and Florida Healthy Kids Corp. The proposed settlement of $137.5 million would address its civil whistle-blower cases, but it is far too little in light of how WellCare's top officials allegedly plotted to cheat taxpayers and mistreat the insured. Hellein plans to challenge the settlement, which would have to be approved by a federal court.

Curiously, Florida still contracts with WellCare to help manage its government health care plans. After WellCare agreed to settle a criminal charge, Florida should have looked for someone else to do the work. Could it be that the millions of dollars WellCare has contributed to Florida politicians over the years is helping to shield the company?