A settlement has been reached in a whistleblower class action lawsuit brought against WellCare Health Plans Inc who is accused of a number of violations of the False Claims Act.
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 this agreement.
There were four whistleblowers that initiated cases against WellCare Health Plans Inc. The whistleblower that triggered the government's investigation will receive approximately $20.75 million. The other three whistleblowers will share in a recovery of $4.66 million and will be entitled to receive an additional share of any contingency payment.
The first whistleblower lawsuit was filed June 2006. The government's complaint 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, including the Florida Medicaid and Florida Healthy Kids programs; 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.
