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WellCare to pay $10 million to settle claims with the SEC

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BY RICHARD MULLINS

MEDIA GENERAL NEWS SERVICE

Published: May 22, 2009

TAMPA - For the second time in a few weeks, WellCare Health Plans has moved to settle a government investigation into its business practices.

WellCare will pay $10 million to settle claims by the Securities and Exchange Commission that the health plan administrator artificially boosted profits by short-changing $40 million from the Florida Agency for Health Care Administration, and the Florida Healthy Kids Corporation.

The "scheme" boosted WellCare's annual profits by up to 14 percent in some years between 2004 and 2007, the SEC said.

WellCare neither admitted nor denied claims listed by the SEC though it will pay the penalty related to the settlement. WellCare is one of the nation's largest administrators of government health plans, though federal regulators have barred WellCare from signing up new Medicare customers, saying its practices don't meet quality standards.

The deal announced Monday mirrors a settlement WellCare announced on May 5 with the U.S. Attorney's Office in Florida where the company did admit such a "scheme" defraud state health agencies, at least between November 2003 and October 2007.

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