WellCare Health Plans has restated its financial results from 2004 through the first half of 2007, explaining that it overstated profits because of accounting errors and overcharged Florida and Illinois for Medicaid contracts.
WellCare said that it owes the two states refunds of about $46.5 million for three contracts: Florida Medicaid behavioral health; Floridas Healthy Kids program; and Illinois Medicaid. The company also will restate earnings down by 9% in 2005 and 2006 and 5% for the first half of 2007.
Last October, about 200 federal agents raided WellCares Tampa, Fla., headquarters, seizing files. The company is still under investigation by federal officials as well as state health regulators from Florida and Connecticut. WellCare has not released full financial statements for 2007 because of ongoing investigations. In January, the companys board of directors fired top executives, including the chairman and chief executive officer. WellCares stock is down about 75% since just before the raid.
Charles Berg, WellCares executive chairman since January, said in a written statement that the decision to restate historical financial statements is an appropriate step in positioning the company for the future. -- by Rebecca Vesely