WellCare Health Plans, Inc. — $217.5 Million

WellCare Health Plans (“WellCare”), a leading health management organization that provides or arranges for the provision of managed care services under government-sponsored health care programs, agreed to pay the United States and nine States $137.5 million to resolve its liabilities under the False Claims Act. WellCare also agreed to pay $80 million as part of a Deferred Prosecution Agreement with the United States, entered into a Corporate Integrity Agreement with HHS-OIG, and resolved its potential liabilities to the SEC by entering into a consent judgment and agreeing to pay a civil penalty of $10 million.

WellCare operates a variety of Medicaid and Medicare plans, including prescription drug plans, pursuant to contracts with the federal and state governments. Our whistleblower client alleged that WellCare knowingly violated the law, its contracts, several provisions of the federal and comparable state False Claims Acts, and the Medicare and Medicaid Anti-Kickback Statute. It did so, by:

• overstating its expenses in delivering health care and underreporting its profit margin and Medical Loss Ratio;
• manipulating its Incurred But Not Reported (IBNR) (an actuarial estimate of claims which have not yet been reported or paid, but are likely to be incurred within a certain time frame);
• upcoding services, claims, and disease states by manipulating the Risk Adjusted Payment System (RAPS), which is used by CMS to calculate the per member per month (PMPM) premium paid to health plans such as WellCare;
• offering and paying illegal remuneration and kickbacks to participating physicians;
• operating a sham Special Investigations Unit (SIU) that failed to perform its oversight responsibilities with respect to claims submitted to Medicare and Medicaid by providers and third party administrators, and claims associated with its Medicare Part D Prescription Drug Plan; and
• engaging in sales and marketing abuses.

 United States et al. ex rel. SF United Partners, v. WellCare Health Plans, Inc., et al., Case No. 3:07cv1688 (SRU) (D. Conn.)