DOW JONES NEWSWIRES
WellCare Health Plans Inc. (WCG) resolved an informal Securities
and Exchange Commission probe of its accounting with an agreement
to pay just over $10 million plus interest, as the company
continues to clear its slate of fraud investigations.
"We are pleased that this matter has been resolved," said
General Counsel Thomas F. O'Neil III. "From the outset, WellCare
cooperated fully with the SEC, and we are committed to
enterprise-wide regulatory compliance and ethical business
practices."
In July, the WellCare board determined the company should
restate financial statements to correct errors related to
compliance with refund requirements in certain contracts.
Earlier this month, WellCare agreed to pay $80 million to settle
Medicaid-fraud probes by the U.S. Attorney's Office for the Middle
District of Florida and the Florida Attorney General's Office. The
company is also in talks to resolve probes by the U.S. Department
of Justice's civil division and U.S. Department of Health and Human
Services.
Under the latest settlement, the provider of managed-care
services for government-sponsored health-care programs will pay a
civil penalty of $10 million and $1 for disgorgement. The first
$2.5 million payment is due within 30 days. The settlement also
enjoins any further violations.
WellCare noted it won't record any further charges related to
the SEC probe beyond the $50 million reserve created in the first
quarter for settling government probes. In the first quarter, the
company swung to a loss as a result of that charge, while revenue
increased 13%. The company also cited increased costs at its
Medicare Advantage private fee-for-service plans, a market the
company is exiting.
WellCare shares were recently up 4.1% at $17.21. The shares have
rebounded strongly from a low of $6.12 in mid-November but remain
off about two-thirds from their 52-week high last June.
-By Jay Miller, Dow Jones Newswires; 201-938-2331;
jay.miller@dowjones.com
