WellCare Health Plans, the embattled Medicaid and Medicare managed-care firm, has received final approval to pay $88 million in cash and $113 million in stock to settle a class-action lawsuit from shareholders who accused management of damaging the company by committing fraud between 2002 and 2007.
WellCare class-action settlement OK'd
The settlement, mentioned in an earnings report for the Tampa, Fla.-based firm, comes on top of a proposed settlement of $137 million in cash with four whistle-blowers, federal civil authorities and the attorneys general of nine states. The firm has also paid $80 million in a federal criminal investigation, and $10 million to the Securities and Exchange Commission.
WellCare has been beset by allegations of illegality for its accounting and billing practices prior to 2007, including a system in which executives conspired to falsely inflate expenses in a Florida managed-care program in order to meet legal requirements for medical-loss ratios.
WellCare, which now operates under deferred prosecution and corporate integrity agreements, has since sued three of its former executives to recoup losses because of the fraud. Five former executives were also indicted criminally in March.
Send us a letter
Have an opinion about this story? Click here to submit a Letter to the Editor, and we may publish it in print.