The U.S. Department of Justice announced settlement of its claims against healthcare insurer, WellCare Health Plans, Inc., on April 3. The federal government and nine other states, including Georgia, will share in penalty payments of $137.5 million to as much as $252.5 million. The company will also bear the costs of implementing a Corporate Integrity Agreement and repairing the damage to its reputation damage inside and outside the company. Yes, compliance failures are always expensive.
These days there seems to be growing demand for accommodations in white-collar jails, too. Several corporate officers were indicted, as has been the case with a number of healthcare fraud investigations in recent years. This is also another case in which a company lawyer, this time the general counsel, was among those indicted for criminal conduct. This is a trend that is of great interest to healthcare lawyers, for obvious reasons. It is further confirmation that the days of the company lawyer being completely insulated from responsibility for the actions of his or her corporate clients are over.
Here are excerpts from the press release:
The lawsuits alleged a number of schemes to submit false claims to Medicare and various Medicaid programs, including allegations that WellCare falsely inflated the amount it claimed to be spending on medical care in order to avoid returning money to Medicaid and other programs in various states… knowingly retained overpayments it had received from Florida Medicaid for infant care; and falsified data that misrepresented the medical conditions of patients and the treatments they received.
Additionally, it was alleged that WellCare engaged in certain marketing abuses, including the “cherrypicking” of healthy patients in order to avoid future costs; manipulated “grades of service” or other performance metrics regarding its call center; and operated a sham special investigations unit.
The settlement requires that WellCare pay the United States and nine states – Connecticut, Florida, Georgia, Hawaii, Illinois, Indiana, Missouri, New York and Ohio ….