WASHINGTON (Legal Newsline) -- WellCare Health Plans Inc., a Tampa-based managed health care service company, will pay $137.5 million to the federal government and nine states to resolve four lawsuits.
The Department of Justice said Aprl 3 the payment relates to violations of the False Claims Act.
The company furnishes 2.6 million Americans with Medicare and Medicaid benefits. Whistleblowers alleged it submitted false claims to Medicare and various Medicaid programs.
Wellcare must pay the federal government and the states of Connecticut, Florida, Georgia, Hawaii, Illinois, Indiana, Missouri, New York and Ohio a total of $137.5 million.
"Government health plans increasingly rely on managed care organizations to provide patient care," said Stuart F. Delery, Acting Assistant Attorney General for the Justice Department's Civil Division. "This case illustrates our commitment to ensure that government funds are in fact used to render care and not to line the pockets of those more concerned with the bottom line."
This is not the company's first transgression. The government initiated a criminal and civil investigation of WellCare in 2006. By 2009, WellCare entered a Deferred Prosecution Agreement with the U.S. Attorney in the Middle District of Florida. It paid $40 million in restitution and forfeited an additional $40 million.
The U.S. Attorney's office also has pursued criminal charges against several former Wellcare employees. One former WellCare analyst, Gregory West, entered into a plea agreement and pleaded guilty to a conspiracy charge. He is currently awaiting sentencing. Five former executives were indicted in March 2011. Their trial is scheduled for January 2013.
This resolution arrangement means that WellCare has paid a total of $217.5 million in fines.
According to the DOJ announcement, the four lawsuits were filed using the qui tam provisions of the False Claims Act, which allows private parties to file suit on behalf of the United States and share in any recovery.
Sean Hellein, a financial analyst formerly employed by WellCare whose qui tam complaint initiated the government's investigation, will receive approximately $20.75 million.
The other three relators -- Clark Bolton, SF United Partners Inc. and Eugene Gonzalez -- will split about $4.66 million and will be entitled to receive an additional share of any contingency payment.
"Fraud committed by managed care companies harms the integrity of the Medicare and Medicaid programs and increases the healthcare burden for all of us," said David B. Fein, U.S. Attorney for the District of Connecticut. "The government is committed to preventing fraud in federal and state health care programs, and managed care companies that are dishonest will be held accountable."
"Ensuring the integrity of the Medicaid and Medicare managed care programs is one of our highest priorities" said Daniel R. Levinson, Inspector General of the U.S. Department of Health & Human Services. "OIG will work vigilantly with law enforcement partners at all levels of government to safeguard this vital program."