DOW JONES NEWSWIRES
Wellcare Health Plans Inc. (WCG) will pay $80 million as part of
a deferred-prosecution agreement with state and federal officials
to resolve allegations it tried to defraud Florida's Medicaid and
Health Kids programs.
Shares jumped 16% to $18.17. The stock is up 41% this year, but
remains far below the $128 level shares were at in October 2007 as
agents of the Federal Bureau of Investigation, the Department of
Health and Human Services and the Florida attorney general's
Medicaid fraud unit raided WellCare's headquarters in Tampa.
The investigation centered at least in part on allegations
WellCare inflated the amount it spent on mental-health care in
order to keep money it should have refunded to Florida's Medicaid
program.
Company executives on Tuesday expressed pleasure at agreeing to
the deal, saying WellCare cooperated fully with the probe and has
enacted various compliance efforts as a result.
The agreement with Florida and federal officials calls for
WellCare to retain an independent monitor for 18 months. The
company will pay $80 million as part of the deal, $35.2 million of
which it paid last August. Another $25 million is due within one
week of the agreement's finaization, with the remaining $19.8
million to be paid by year's end.
-By Kevin Kingsbury, Dow Jones Newswires; 201-938-2136;
kevin.kingsbury@dowjones.com