The whistleblower who made a federal case out of Medicaid fraud at WellCare Health Plans – going so far as to wear a wire under his clothes to gather evidence for the FBI – refuses to let the company off the hook for $137.5 million, even though the government is ready to move on.
Tampa attorney Barry Cohen said he and his client, Sein Hellein, aren’t signing the agreement because the company stole betweem $400 and $600 million, by their calculations.
“We want to hold them accountable,” Cohen said, pointing out that under the federal qui tam statute – the False Claims Act – companies can be required to pay back double or triple what they stole.
But WellCare’s new executive team has persuaded the government that it can’t afford to pay more than $137.5 million. Cohen said, "They do have the ability to pay and we can prove it.”
Hellein’s holdout means there will have to be a “fairness hearing” before a federal judge in Tampa to determine how much money the company stole and how much it is capable of paying back, with or without damages.
On Monday, the Tampa-based company filed a document with the Securities and Exchange Commission that announced it had signed a “corporate integrity agreement” with the Inspector General of of Health and Human Services that calls, among other things, for internal and external reviews for five years.
The Inspector General’s sign-off is crucial for WellCare, since it has no commercial business and exclusively contracts with Medicare and Medicaid programs.
The company’s announcement said all other governmental entities – the Civil Division of the U.S. Department of Justice, the U.S. Attorney’s Offices in Tampa and Connecticut, and nine state governments including Florida – had signed the agreement, as well.
If the settlement ends up at $137.5 million, Florida would receive about $23 million of it, according to earlier filings.
WellCare settled its criminal case with the Florida Attorney General’s Office and the U.S. Attorney’s Office in Tampa two years ago, agreeing to pay $80 million. That settlement agreement said the company defrauded Florida Medicaid of $40 million by misstating what it actually spent on care for low-income adults and children.
But Cohen has said the theft was far higher, perhaps as much as $300 million in Florida alone.
It came to light in October 2007, when the FBI and other law-enforcement officials raided the Tampa headquarters and carted off computers and boxes of files. The executives who ran WellCare at the time were ousted by the board shortly thereafter.
In March of this year, a federal grand jury indicted five former WellCare executives, charging them with conspiracy to commit Medicaid fraud and making false statements.
They are: former CEO Todd S. Farha, 42, of Tampa; former general counsel Thaddeus Bereday, 45, of Tampa; former CFO Paul L. Behrens, 49, of Odessa; former vice president of Harmony Behavioral Health William Kale, 61, of Oldsmar; and former vice president of Medical Economics Peter E. Clay, 54, of Massachusetts.
Last summer, Cohen persuaded U.S. District Court Judge James S. Moody to unseal Hellein’s complaint, which portrayed a company culture so hard-hearted that it gave bonuses to employees who dumped sick newborns and terminally ill patients from the membership rolls. Hellein said the company embraced fraudulent accounting as a business model.
--Carol Gentry, Editor, can be reached at 727-410-3266 or by e-mail at Carol.Gentry@HealthNewsFlorida.org.
