Equipment Available before passage of the Healthcare Reform Act of 2009
After bringing a False Claims Act case to the attention of federal agencies, a Florida whistleblower remained working at WellCare Health Plans offices and then even went so far as to wear a hidden wire (probably just like you see on television) during business meetings, helping the Justice Department (DOJ) in an 18-month undercover operation to capture evidence of alleged fraudulent practices by WellCare officers and employees.
All of this has come to light as of June 25, 2010, when a U.S. District Court judge ordered the complaint unsealed. The original complaint is still not available, but the complaint filed on June 21, in the US District Court for the Middle Florida District, is now available.
(Find it here and other documents related to the case here.)
Might we see an episode of Law & Order soon with this kind of a case? I think it’s pretty gutsy to wear a wire for the Feds, but in this case, the pay-off is much more than just “doing the right thing” or even protecting future victims. Whistleblowers get pretty hefty pay-days, with or without a wire. Perhaps the investigators used that pay-day as a carrot? Wear a wire, get more evidence, you get a bigger pay-day?
Wait… A Settlement was Reached?
Three years later, WellCare reportedly announces that it has agreed to a “Preliminary Settlement” with the Department of Justice, Civil Division, to pay $137.5 million to “settle their pending inquiries.” (Notice that there is no mention of any criminal inquiries…) You can see what WellCare filed with the SEC about this, here. (We can’t seem to find any documents from WellCare or the government, yet, about this supposed settlement.)
Evidently, the whistleblower was not invited to the negotiation where a settlement was reached, and understandably is not keen on the mere $137.5 million settlement that the government has agreed to with WellCare. According to the whistleblower’s attorney, “…the proposed settlement would permit taxpayers to be unfairly disadvantaged by a settlement that pays less than half of what our pleadings suggest was stolen, to say nothing of the requirement of triple damages under the False Claims Act.“ The attorney and his client estimated that WellCare received over $400 million to perhaps as much as $600 million in fraudulent payments, from a combination of Medicaid and Medicare programs.
Since whistleblowers get 15-25% of the total penalties and damages paid by the offending party, it’s pretty easy to see why this whistleblower is upset — he could be missing out on 15-25% of perhaps as much as $800 million.
The $137.5 million, however, is still only “preliminary” and must be approved in court. We’ve searched the web and there are yet no announcements by the DOJ or any of its Civil Divisions, nor by the OIG or the FBI, related to this settlement. One has to wonder, how did they arrive at this number, which is so much smaller than the alleged frauds? Oh, and, what about penalties and damages? Aren’t those supposed to be added on?
Even if the whistleblower’s figures are inflated, there still appears to be significant fraud. Did the FBI not find much then?
Where’s the beef?
According to several news reports, the DOJ amassed over 1,000 hours of audio and video evidence of alleged fraudulent conduct by WellCare. The whole investigation took almost four years, and included a raid by over 200 federal agents from the FBI, DOJ and the OIG, on the WellCare Tampa headquarters, where they seized many computers and files.
In the complaint, the whistleblower alleges that WellCare purposefully and knowingly over-billed the seven states that it contracted with as a Medicaid HMO. It appears that WellCare used accounting “tricks” to move money around to inflate costs, thereby avoiding having to pay back monies to the state Medicaid programs.
One of the most distrubing allegations concerns WellCare’s apparent complete lack of compassion and utter arrogance in handling care for a large number of newborn babies. One of the examples cited by the whistleblower involved not only unlawfully denying care to 475 newborns for the purpose of eliminating the costs of caring for them, but then rewarding the staff who executed those denials (and perpetrated the fraud) by honoring them with a large, expensive corporate dinner meeting.
Read the complaint, form your own opinion. But keep in mind, the government has yet to file ITS complaint.
But Wait…There’s More
This has been going on for years, now. So, one wonders, what happened to the WellCare officials who (allegedly) perpetrated these frauds? According to at least one news report, they have all been replaced since then, and there is an ongoing criminal investigation into former executives accused of committing frauds.
Nevertheless, there also appears to be an ongoing feud between the press — specifically Health News Florida — and the Florida state Insurance Commissioner Kevin McCarty, about the whole case. Health News Florida reported on July 1, 2010, that McCarty sent them a letter saying there is “no question” that some of WellCare’s dealings (under former management) were illegal, but that the whistleblower complaint also included “unfounded allegations.”
“Unfounded” or not, someone else in the Florida state government is still very concerned about all that fraud and wants somebody prosecuted: after the whitstleblower complaint was unsealed, the Florida secretary of healthcare administration sent a letter to Florida’s Attorney General and urged him to “investigate and attempt to prosecute officials at WellCare.”
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