WellCare Health Plans, Tampa, Fla., reaffirmed that ongoing state and federal investigations will not affect healthcare delivery or payments, as it released strong preliminary third-quarter earnings.
On a conference call with investors, officials from the managed-care company said that they did not yet know the scope of the investigations or whether they will lead to fines, penalties, operating restrictions or impacts of the companys historical financial statements.
WellCare said it learned that a former employee of the companys investigations unit who was terminated on Oct. 1 filed a whistle-blower lawsuit on Oct. 25 against the company in Florida court. Because the complaint is under seal, WellCare officials said they did not know whether it was related to the state and federal investigations or allegations of mental-healthcare spending fraud outlined in a Nov. 2 Wall Street Journal article.
On Oct. 24, about 200 agents raided WellCares headquarters. WellCare officials said that they have not been told why they are under investigation by the Justice Department, FBI, HHS inspector general's office and Floridas U.S. attorneys office. Shares of the company rose 40% upon reporting its preliminary earnings. The stock had fallen more than 60% in the days after the raid. -- by Rebecca Vesely
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