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Hospital system accused of abetting fraud

By Carol Gentry and John W. Johnson
6/28/2010 © Health News Florida

A hospital system in South Florida helped WellCare Health Plans hide some of the money it is accused of stealing from the Florida Medicaid program, according to a whistleblower complaint.

The complaint by Sean Hellein, a financial analyst who worked for WellCare Health Plans from November 2002 until October 2007, said South Broward Hospital District “conspired” to help WellCare avoid repayment of millions of dollars.

South Broward is now known as Memorial Healthcare System, which advertises itself as the fifth-largest public healthcare system in the nation.

MHS doesn’t yet have a copy of the complaint, Media Relations Director Kerting Baldwin said Saturday. “As with any complaint, we need to first examine the issues and their validity. At this time, we are not aware of the details of this complaint and anything we say about it would be pure speculation.”

The order unsealing the complaint was issued late Thursday so the complaint is a public record; however, it is not yet available online through the federal court system.

The 60-page complaint sets out a number of ways in which WellCare systematically defrauded taxpayers, both the federal government and several states, mainly Florida. It estimates the fraud at $400 to $600 million.

MHS helped WellCare in its false accounting by accepting payment through one Medicaid program for expenses actually incurred by another, the complaint says. That way, WellCare could fool state officials into thinking the company was spending more on patient care than it truly was.

WellCare needed to make it appear that it was paying more than it actually was for the care of patients enrolled in two programs: the mental-health and substance-abuse arm of Medicaid, under the name of Harmony Behavioral Health, and the Healthy Kids program, a state-subsidized sliding-scale program for uninsured children in modest-income families.

The state required that WellCare refund money if it spent less than 80 percent of the Harmony premium dollars on patient treatment. In a similar arrangement, Healthy Kids got a partial refund if WellCare spent less than 85 percent of the premium on patient care.

The contracts worked out between WellCare and South Broward in late 2005 enabled WellCare to increase its apparent costs for Healthy Kids by 31.6 percent and reduce apparent costs for other contracts that did not contain a repayment obligation, the complaint said.

In a Dec. 7, 2005 email, then-WellCare CEO Todd Farha admitted that WellCare’s contract with South Broward “was designed to push us up to the 80% give-back point with the state,” according to the complaint.

On the same date, the whistleblower said, he was told by another executive that he should not discuss high costs in the Healthy Kids contracts signed with South Broward because this was a “politically sensitive” topic and “part of our business strategy.”

--Carol Gentry, Editor, can be reached at 727-410-3266 or by e-mail. John W. Johnson is an independent journalist in Boca Raton.