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WellCare Medicaid Fraud Trial Continues in Tampa

After three weeks of trial, testimony continues in a Tampa federal courtroom in the Medicaid fraud trial of four former WellCare executives. Former executives at the Tampa-based health care plan company, Todd Farha, Paul Behrens, William Kale and Peter Clay are all accused of defrauding the Medicaid program of more than $30 million. Their defense attorneys argue that the men did not break the law, blaming Florida's Agency for Health Care Administration for misreading state law, failing to specify what it wanted on WellCare's expense reports and concealing information on how it calculated what the firm was paid to handle care for Medicaid recipients.

Prosecutors claim that the executives were greedy and led an "elaborate scheme" to defraud the government of funds that should have gone back to the state to care for poor children and families.

Each man is charged with one count of conspiracy to commit health care fraud, four counts of health care fraud and of making false statements relating to health care matters. Clay also faces two counts of making false statements to federal agents. The men face up to 10 years in prison for each health care fraud count, and up to five years for the other charges.

WellCare has already paid $137.5 million to settle civil fraud claims.

The laws and regulations relevant to privately run Medicaid programs are complex and have taken a substantial amount of time to explain to jurors in the case. In 2002, a year before the alleged fraud began, the Florida Legislature had passed a law pertaining to behavioral health services for Medicaid recipients, requiring Medicaid managed care companies to spend 80 percent of the premiums they get from the state on services. If less was spent, the difference was to go to the state.

Prosecutors claim WellCare officials determined they would be obligated to return $4.8 million a year under the law. They allegedly came up with a plan to inflate costs and reduce what they owed the state. The defense denies any wrong-doing, even alleging that the regulatory agency knew and approved of the way they were handling these services and premiums.

The federal investigation into WellCare was prompted by a whistle-blower complaint. The former employee who blew the whistle, Sean Hellein, received nearly $21 million for telling the government about the alleged fraud. Defense attorneys plan to attack Hellein's credibility.

This week, jurors heard secretly recorded conversations between WellCare employees, discussing the state's request for the insurer to put price tags on the mental health services it purchased with government Medicaid money. The employees weren't sure how to handle it within their company, as two WellCare HMO's paid a third WellCare company called Harmony for those services.

Prosecutors allege that the complicated calculations discussed in the recording show an attempt to hide profit it would otherwise have to refund to the state.

The trial continues and is expected to last for several months.

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  • norml
  • National association of criminal defense lawyers
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  • Florida Association of Criminal Defense Lawyers

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