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WellCare’s back, reports deception

By Carol Gentry
11/3/2009 © Health News Florida

TAMPA -- Federal sanctions imposed on WellCare Health Plans in March were lifted Tuesday, just in time for the company to sell its Medicare drug and health plans for 2010. The suspension had been imposed after officials said they were inundated with complaints. In other news, WellCare announced earnings for the third quarter showing that the company is again making money.

The letter of notification includes a revelation that some WellCare managers told employees to alter documents before a federal audit. The event occurred in late May, only weeks after the company settled criminal charges of Medicaid fraud by agreeing to pay $90 million in fines. 

Company executives learned of the deception through a tip to the "compliance hotline" and reported it immediately to federal authorities, according to Tuesday's letter to the company from the Centers for Medicare and Medicaid Services, obtained by Health News Florida.

The orders were given by unnamed managers in the Appeals and Grievances Department "in an effort to mislead...auditors and avoid detection" of the department's failure to comply with federal requirements. The notice does not name the managers or say what happened to them.

CMS said it is reinstating WellCare's privileges to enroll beneficiaries in health and drug plans because the company resolved the problems that led to its suspension. While the company may face some discipline from the latest escapade, it apparently won't be punished severely because executives took immediate action. They notified CMS' Program Integrity Office and conducted an independent investigation into the matter.

However, CMS will be keeping its eye on WellCare, wrote Brenda J. Tranchida, director of program compliance and oversight at the federal agency. 

"If CMS becomes aware that WellCare falsifies or misrepresents data, records or information provided to CMS in the future, CMS will consider all compliance and enforcement options available," from more sanctions to termination, she wrote. The letter was addressed to Charles Berg, executive chairman.

The lifting of sanctions means that WellCare can begin marketing immediately, playing catch-up with competitors. It can begin enrolling beneficiaries when sales season  begins Nov. 15.


Another Tampa-based health plan that has been on federal sanctions, Citrus Health Care Inc., remains suspended, CMS spokesman Peter Ashkenaz said. He gave no hint of whether the plan will be freed in time for sales season.

 WellCare's suspension in March followed a finding of "serious deficiencies" in enrollment, appeals, marketing, agent oversight and reporting breaches of security to CMS. The company "has satisfactorily addressed the deficiencies that formed the basis for the sanction," the letter said. 

The earnings report, released early today before the market opening, showed net income of $28.7 million for the third quarter, which ended Sept. 30, on revenues of $1.67 billion. The company's net income for the year to date was also reported at $28.7 million on revenues of $5.25 billion.  At the same point last year, the company showed a net loss.

WellCare contracts with government programs rather than commercial customers. It reports that as of the end of September, it had 2.3 Medicare enrollees, down 300,000 from the year before, and 1.3 million Medicaid members from several states. Georgia is now WellCare's largest Medicaid program.

--Carol Gentry, Editor, can be reached at 727-410-3266.