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WellCare Health Plans to Pay $137.5 Million to Settle False Claims Act Lawsuits

Earlier this month, the Department of Justice announced a $137.5 million settlement with WellCare Health Plans, Inc. to resolve four separate lawsuits alleging False Claims Act violations.  WellCare provides managed-healthcare services mostly to government-sponsored healthcare programs.  The company provides services to about 2.6 million Medicare and Medicaid beneficiaries across the country.

According to the lawsuits, WellCare participated in various arrangements to submit false claims to Medicare and Medicaid programs.  WellCare allegedly inflated the amount it claimed to be spending on care, retained overpayments from Medicaid, and falsified data about the conditions and treatments of its patients.  Additionally, WellCare was accused of picking healthier patients to supply care to in order to avoid expenses, manipulating billing codes used for its call center, and operating a fake special investigations unit.

Under the terms of the settlement, WellCare will divide up the $137.5 million between the federal government and nine different states: Connecticut, Florida, Georgia, Hawaii, Illinois, Indiana Missouri, New York, and Ohio.  The settlement will be paid out over the course of 36 months, plus interest.  This settlement is the second one reached with WellCare since the government began its civil and criminal investigations into the company in 2006.  The previous settlement totaled $80 million.  Additionally, five former executives of the company were indicted in March of 2011 and are awaiting trial.

Each of the four lawsuits involved in this most recent settlement were filed by whistleblowers under the qui tam provisions of the False Claims Act.  The government’s investigations were prompted by a complaint filed by Sean Hellein, a former WellCare financial analyst, back in 2006.  Hellein will be receiving a $20.7 million share of the settlement as a reward for disclosing WellCare’s fraud.  The other three whistleblowers– Clark Bolton, SF United Partners Inc., and Eugene Gonzales–will share about $4.66 million as their share of the settlement.

Healthcare fraud is particularly abhorrent as it preys on vulnerable individuals with specific and serious healthcare needs.  If you are aware of healthcare fraud being committed, it is important that you take a stand to stop it.  If you need help reporting this type of fraud to the government, contact the attorneys at Tycko & Zavareei today.

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