Medicare and Medicaid Contractor Settles Claim for $137.5 Million

On August 20, 2010, it was announced that a Medicare and Medicaid managed-care company, WellCare Health Plans, Inc., reached a preliminary settlement to pay $137.5 million to settle a False Claims Act case which has been pending for the past four years.  The allegations arise from claims that WellCare was responsible for schemes to avoid repaying overpayments which it received from Florida and New York’s Medicaid programs, inflate reinsurance payments, and disenroll Medicaid beneficiaries whom the company considered unprofitable.  The False Claims Act complaint also alleged that the company stole $400 million to $600 million from Medicare and Medicaid programs in several states.

This lawsuit was initiated by a former WellCare senior analyst, Sean Hellein, who worked with the Justice Department and wore a hidden wire as part of the undercover investigation into the alleged criminal misconduct by WellCare.  The False Claims Act allows the individual who initiates the lawsuit to share in a portion of the recovery obtained in any lawsuit or settlement.

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