Criminal Charges Possible in WellCare Fraud Case

Kristen Kohrt, for HealthLeaders Media , May 14, 2009

Tampa-based WellCare Health Plans, Inc., on May 5 agreed to enter a deferred prosecution agreement with the United States Department of Justice and pay $80 million in restitution and forfeiture in order to avoid healthcare fraud charges. The agreement left open the opportunity for the feds to prosecute individuals involved in the case.

After an ongoing investigation, more than 200 special agents and investigators from the FBI, OIG, and the Florida Medicaid Fraud Control Unit raided WellCare offices, according to a DOJ press release.

The investigation and subsequent raid arose from allegations that WellCare falsely and fraudulently inflated expenditure information submitted to the Florida Medicaid and Healthy Kids programs from mid-2002 through 2006.

In order to avoid healthcare fraud conviction, WellCare must abide by several DPA requirements, including:

  • Consenting to the civil forfeiture of $40 million, as well as an additional payment of $40 million in restitution to the Florida Medicaid and Healthy Kids programs

  • Retaining and paying an independent monitor, selected by the U.S. Attorney's Office, who will review and monitor business operations

  • Continuing to cooperate with the government's ongoing federal and state criminal investigation of former WellCare executives and employees

  • Implementing, within 60 days, updated policies and procedures to ensure accurate reports of federal and state healthcare program information

  • Continuing to develop and operate an effective corporate compliance and governance program that includes adequate internal controls to prevent recurrence of any improper or illegal activities

The fact that the DOJ included a provision requiring WellCare to cooperate with the government's investigations of individuals says that those individuals will likely face criminal charges, says Steve Miller, JD, chief compliance officer for Capital Health System in Trenton, NJ.

"(The DPA) doesn't waive the government's right to pursue individuals, it just says they will not prosecute the corporation," he says. "They likely will be prosecuting individuals or they wouldn't have bothered putting that [requirement] in there."

The DOJ often uses DPAs to avoid putting a company through prosecution, which would likely lead to the company going out of business. The goal of a DPA is to acquire restitution and hold people accountable for their actions, in hopes the company will improve its practices going forward, Miller says.

"The government doesn't want to take a corporation the size of WellCare and put it out of business," he says. "A lot of innocent players would be affected by that."

Kristen Kohrt is the associate editor for Healthcare Auditing Strategies and Healthcare Auditing Weekly, and manages the Healthcare Auditing Resource Center. You can contact her at

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