Tampa Company Investigated for Government Fraud

Federal regulators suspended Tampa-based WellCare Health Plans Inc. from enrolling new customers in its Medicare-backed insurance and drug plans this week. Regulators cited several faults for the suspension including the forging of enrollment documents and providing misleading data to potential customers.

A WellCare spokesperson said the suspension is not related to any government investigation nor to the raid on the company’s offices just over a year ago. Rather, she claims that it entirely related to the quality of WellCare’s business practices. Last summer, though, the company admitted that former executives overbilled government health programs by almost $50 million. A government fraud investigation is pending.

WellCare’s offices were raided by the FBI and Florida regulatory investigators in October 2007. Gregory West, a former WellCare employee, has pleaded guilty to Medicaid fraud in Tampa federal court, admitting that WellCare inflated expenditure reports by submitting falsified expense documents to the state. The fake expenditures allowed WellCare to keep a surplus that was otherwise not allowed by government contract.

West’s guilty plea indicated that there were additional co-conspirators involved in the government fraud scheme at WellCare. If those co-conspirators are ultimately identified and charged, there might be a number of executives looking for Tampa Bay federal criminal defense attorneys.

Late last summer, WellCare agreed to repay $35 million and restated its quarterly and annual profits, reducing reported net income by $32 million. Three top executives resigned.

No criminal charges have been announced against WellCare or its officials at this time. However, investigations by Florida, Connecticut and federal prosecutors are apparently ongoing. An informal investigation is also being conducted currently by the Securities and Exchange Commission. Numerous shareholder lawsuits are pending in civil courts.

WellCare manages care for nearly 2.4 million people on government-sponsored health plans in Florida and seven other states. It is one of the country’s largest administrators of Medicare and Medicaid benefits on behalf of government agencies. The company also has the highest number of complaints made against it among plan administrators.