Appeals Court Upholds Convictions Of Ex-WellCare Executives

Aug 12, 2016

In a 124-page ruling, a federal appeals court Thursday upheld the convictions of four former WellCare Health Plans executives in a case that stemmed from allegations of defrauding Florida's Medicaid program.

A three-judge panel of the 11th U.S. Circuit Court of Appeals upheld convictions against former WellCare CEO and President Todd Farha; former Chief Financial Officer Paul Behrens; former Vice President of Clinical Services William Kale; and former Vice President of Medical Economics Peter Clay.

The four were indicted by a federal grand jury in 2011 on charges related to alleged fraud that happened years earlier.

Thursday's ruling said Farha, Behrens and Kale were convicted on charges involving Medicaid fraud in 2006; Behrens was convicted of making false statements on Medicaid reports for 2006; and Clay was convicted on charges of making false statements to federal agents in 2007.

"At trial, the government proved that together the defendants participated in a fraudulent scheme to file false Medicaid expense reports that misrepresented and overstated the amounts (WellCare subsidiaries) Staywell and HealthEase spent on medical services for Medicaid patients, specifically outpatient behavioral health care services," said the appeals-court ruling written by Judge Frank Hull and joined by judges Gerald Tjoflat and J. Randal Hall. "By overstating these expenses, the defendants helped Staywell and HealthEase retain millions of dollars in tax-subsidized Medicaid funds that they should have refunded to the Florida Agency for Health Care Administration. This, in turn, inflated the profits of Staywell, HealthEase, and WellCare and earned the defendants financial rewards."

The former executives of the Tampa-based managed care company raised a number of issues in the appeal, including arguments about insufficient evidence and improper jury instructions.

But after hearing oral arguments in October, the appeals court rejected the arguments in an extraordinarily detailed ruling.