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Charges Filed Against WellCare Health Plans, Inc.; WellCare Enters Into Deferred Prosecution Agreement, Agrees to Pay $80 Million in Restitution and Forfeiture
Date:5/5/2009

g the required certain medical services to Florida Medicaid and FHKC program recipients."

According to the information, WellCare received money from the Florida health care programs each year under an "80/20" or "85/15" contractual arrangement: WellCare could retain either 20% or 15% of the contractual proceeds it received from AHCA and FHKC for overhead (depending on the contract), but it could only spend the remaining 80% or 85% of proceeds to provide health care services. If WellCare did not spend the 80% or 85% on services pursuant to these contracts, it had to return at least a portion of the unspent money to the Florida health care programs.

The information alleges that WellCare engaged in several fraudulent strategies to avoid returning unspent money to the Florida health care programs. Primarily, WellCare established a wholly-owned entity, "Harmony Behavioral Health, Inc." ("Harmony"), to which it funneled a portion of the 80/20 and 85/15 money it received from its contracts with AHCA and FHKC. WellCare, however, fraudulently reported money that went to Harmony as expenditures on services. Thus, regardless of how much money WellCare actually expended for health care services during each year, WellCare fraudulently avoided refunding the Florida health care programs for money it had given Harmony.

The Deferred Prosecution Agreement

Under the DPA, WellCare agrees to pay a total of $80,000,000 (plus interest), which includes $40,000,000 in restitution to the Florida health care programs and $40,000,000 in civil forfeiture. The DPA specifies that WellCare will pay the money as follows:

(1) WellCare will receive a credit of $35,200,000 for the amount it previously paid pursuant to an August 18, 2008 agreement with the USAO and other parties;

(2) WellCare will pay an additional $25,000,000 within five business days of the effective date of the DPA; and (3) WellCare will pay
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SOURCE U.S. Department of Justice
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