A federal jury in Tampa, Florida found four high-ranking officials of a Florida health maintenance organization (HMO) operator guilty of multiple charges, including health care fraud, making false statements relating to health care matters, and making false statements to a law enforcement officer, the U.S. Justice Department announced this week.
The federal grand jury indicted the WellCare Health Plans Inc. executives on March 2, 2011, charging them with various criminal violations stemming from a scheme the company devised to defraud Florida’s Medicaid program.
On Monday, June 10, the jury convicted WellCare Health Plans Inc. CEO Todd Farha, 45, of two counts of health care fraud. Former WellCare Chief Financial Officer Paul Behrens, 51, was convicted of two counts of health care fraud and two counts of making false statements. Peter E. Clay, 56, former WellCare vice president of medical economics, was found guilty of making false statements to a law enforcement officer. William Kale, 63, former vice president of Harmony Behavioral Health, a WellCare subsidiary, was found guilty of two counts of health care fraud.
WellCare’s efforts to defraud the State’s public health care fund lasted from the summer of 2003 through the fall of 2007. According to the Justice Department, WellCare “falsely and fraudulently submitted inflated expenditure information” in its reports to the Agency for Health Care Administration (AHCA), the state agency that contracted WellCare to administer Florida’s Medicaid services.
WellCare’s fraudulent reports were designed to retain Medicaid funds it received for the administration of behavioral health care services but did not spend. Florida law requires HMOs to pay back funds when they expend less than 80 percent of the Medicaid premium.
Federal officials caught on to the Wellcare fraud scheme when Sean Hellein, a former senior financial analyst for WellCare, filed a whistleblower lawsuit under the False Claims Act (FCA), which allows private individuals to sue on behalf of the U.S. government and share a percentage of the recovery.
In 2006, Mr. Hellein secretly recorded WellCare executives discussing ways to double bill taxpayer-funded federal health care programs.
Mr. Hellein’s information led to an FBI raid on WellCare’s Tampa headquarters in October 2007 and set in motion legal proceedings against the company, including recovery of stolen funds and the criminal charges against WellCare’s top executives.
In May 2009, former WellCare analyst Gregory West, 55, of Tampa, entered a plea agreement admitting to participating in the scheme to defraud the Medicaid program and agreed to cooperate in the government’s investigation. At trial, West provided extensive and detailed testimony explaining the complex scheme. Other former WellCare executives provided additional testimony about the four executives’ roles in the scheme.
Mr. Heillien received nearly $21 million for his vital role in exposing WellCare’s massive fraud scheme. His whistleblower lawsuit allowed the federal government to recover $217.5 million of government health care funds.
The maximum penalty for each of the health care fraud counts is 10 years in prison. The maximum penalty for all other counts is five years in prison. A sentencing date for the convicted men has not yet been determined.