WellCare Health Plans Inc. will pay $137.5 million to the federal government and nine states to settle lawsuits alleging violations of the False Claims Act. WellCare provides managed health care services for approximately 2.6 million Medicare and Medicaid beneficiaries nationwide. The four lawsuits were filed by whistleblowers, known as relators, under the qui tam provisions of the False Claims Act. As we have reported in previous issues, private parties are allowed to file suit on behalf of the United States and can share in any recovery received in the case.
The lawsuits alleged that WellCare submitted false claims to Medicare and various Medicaid programs, including falsely inflating the amount WellCare claimed to be spending on medical care in order to avoid returning money to Medicaid and various other state programs. The lawsuits also alleged that WellCare knowingly retained overpayments it had received from Florida Medicaid for infant care, as well as falsified data that misrepresented the medical conditions of patients and the treatments they received.
The settlement requires that Wellcare pay the United States and nine states – Connecticut, Florida, Georgia, Hawaii, Illinois, Indiana, Missouri, New York and Ohio – a total of $137.5 million. WellCare may also be required to pay an additional $35 million in the event that the company is sold or experiences a change in control within three years of the agreement. This is the second monetary settlement reached with WellCare since the government initiated criminal and civil investigations of WellCare in 2006. To date, the total recovery from WellCare as a result of these civil suits is now $217.5 million. Robert E. O’Neill, U.S. Attorney for the Middle District of Florida, had this to say:
The monies recovered in restitution and from this settlement agreement will go to the federal and state programs which suffered these losses, while the forfeited funds will go to law enforcement to help fund future investigations. This settlement should serve as notice to those defrauding state and federal healthcare programs that, in addition to appropriate criminal prosecutions, we will utilize civil suits to root out their conduct and recover their ill-gotten gains.
Stuart F. Delery, Acting Assistant Attorney General for the Justice Department’s Civil Division, added:
Government health plans increasingly rely on managed care organizations to provide patient care. 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.
David B. Fein, U.S. Attorney for the District of Connecticut, who was involved in this matter, made a very good point as to how this fraud affects the public, when he said:
Fraud committed by managed care companies harms the integrity of the Medicare and Medicaid programs and increases the healthcare burden for all of us. 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.
Lawyers in our firm have also been committed to fighting on behalf of states that have been subject to Medicaid fraud. Beginning in 2005, our firm has represented the Attorneys General of Alabama, Alaska, Hawaii, Kansas, Louisiana, Mississippi, South Carolina, and Utah in litigation against several drug manufacturers for the fraudulent pricing of prescription drugs reimbursed by those states’ Medicaid programs. These lawsuits have not only brought about a positive change in our country’s Medicaid programs, but importantly, billions of dollars in overpayments have been recovered for the states who filed suits as a result of fraudulent price reporting schemes.
Source: The United States Department of Justice; Office of Public Affairs
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