FBI raid shutters Medicare insurer (WellCare - formerly owned by George Soros)

St. Petersburg Times ^ | 10/25/07 | Kris Hundley

[wagglebee]

For the past two years, analysts have been asking how fast-growing WellCare Health Plans of Tampa has been able to make so much money running government health plans for the poor and elderly. Now government investigators may be asking the same thing.

On a rainy Wednesday morning, more than 200 federal and state agents swarmed WellCare's campus on Henderson Road in Tampa, forcing employees onto the sidewalk and into their cars.

Steven Meitzen, 51, who arrived at WellCare about 9:40 a.m. for a job interview, said he was initially told it was a bomb scare. "Later on, I talked to someone who said the FBI had a subpoena and were looking for records," he said.

By midday, the complex's parking garages were half-empty, but federal agents remained busy. They were still milling around WellCare's buildings in the early evening; a Ryder truck was backed up to a loading dock.

The U.S. Attorney's Office in Tampa said little about the search, which involved personnel from the Federal Bureau of Investigation, U.S. Department of Health and Human Services and the Florida attorney general's Medicaid Fraud Control Unit. The search warrant is sealed.

Both federal and state officials, however, said that the investigation should have no impact on delivery of health care to the more than 2.3-million members of WellCare's managed care plans.

The company's customers are about evenly divided between Medicare and Medicaid plans. WellCare is the largest Medicaid provider in Florida, with more than 350,000 members. The company also offers Medicare Advantage plans to seniors in seven states and a stand-alone drug plan nationwide.

The timing of the raid could be detrimental as WellCare is in the midst of convincing seniors to sign up for its 2008 plans.

WellCare issued a release saying that it was cooperating with authorities and that essential services to members would remain uninterrupted. Though its customer service number was working Wednesday, WellCare's Web site was replaced with a notice saying, "We're sorry, but something went wrong. We've been notified about this issue and we'll take a look at it shortly."

The company, which went public in July 2004 at $17 a share, has had a meteoric rise, with its stock more than doubling in the past 12 months. On Wednesday, WellCare's shares dropped $6.77 or 5.5 percent, to $115.50 before trading was halted about 11 a.m. It ended the day down $7.10 at $115.17.

FTN Midwest analyst Peter Costa downgraded his rating on WellCare stock to "sell" from "neutral" on Wednesday, citing the search. Costa said the investigation appeared to be a criminal one.

"Criminal investigations are harder to prove, likely to be more company specific and carry stiffer penalties, including being barred from doing business with the government if it is for fraud, which it most likely is given the departments involved," Costa said in a research note.

Thomas Carroll, analyst with Stifel Nicolaus in Baltimore, called the raid "ominous" and downgraded WellCare shares to "sell" from "hold" in a note to clients. Contacts within the company said BlackBerries, computers and files were seized from corporate, marketing and human resources offices, according to Carroll.

Carroll suspects the raid is potentially the result of a lawsuit in which an employee brought a matter to the attention of authorities.

"When the FBI and HHS raid a health care company, the outlook on earnings, legal proceedings and the entire operations of the company can be questioned," Carroll said.

WellCare's business practices have come under increased criticism over the past several months. Last spring, the company said independent sales agents in Georgia enrolled dead people in Medicare plans. In May and June, WellCare representatives appeared along with other insurance executives at hearings in the Senate and House into aggressive Medicare marketing practices. WellCare and six other insurers subsequently agreed to a temporary halt in marketing one type of Medicare plan, while promising to initiate consumer safeguards. In August, however, Medicare cited WellCare once again for violating several provisions of its Medicare contract, including sales practices.

WellCare, which had earnings of $139.2-million in 2006, gets all of its nearly $4-billion in revenues from state or federal governments. Profits come from the difference between the amount received from the government and the amount spent on overhead and medical care for its members.

The company routinely has outperformed its competition; for the quarter ending in June, the company said just 80.8 percent of its revenue was spent on medical claims, down from 82.7 percent a year ago.

WellCare's high margins have had analysts scratching their heads. In April, two Wall Street analysts said Florida in particular was too generous in its Medicaid reimbursement to WellCare. The analysts, with CIBC World Markets and Goldman Sachs & Co., were particularly critical of WellCare's use of a subsidiary in the Cayman Islands for reinsurance, saying it allowed the company to shift money in the form of reinsurance premiums.

WellCare said its reinsurance arrangement had been approved by stateregulators and rejected claims it was overpaid.

Florida Medicaid payments were raised 7.5 percent in July, to an average of $215 per member per month. Cuts of about 1.5 percent could be on the way in January, however, if Gov. Charlie Crist approves recommendations made during the recent special legislative session.

Medicare reimbursements average about $800 per member per month and will increase 3.5 percent next year. Because the federal government wanted to encourage private insurers to offer Medicare plans, it pays about 12 percent more for seniors on private plans than it does for traditional Medicare.

WellCare was a slow-growing Florida company until 1992 when its owner, Dr. Kiran Patel, sold it to a New York investment group led by financier George Soros. The bankers hired Todd Farha, an aggressive Harvard MBA, to transform the company. Under his leadership, WellCare's earnings have increased eight-fold and the company's investors and executives like Farha have profited handsomely from appreciation in its stock.

In an interview last year, Farha credited WellCare's success with hard work, attractive member benefits and close attention to the basics. But he has also nurtured the kinds of relationships invaluable to a company dependent on government funding.

WellCare and its affiliates have given the Republican Party of Florida some $105,000 in contributions this year, according to state election records. They've also given the Florida Democratic Party $5,000 this year. In 2006, WellCare's PAC gave $66,000 to federal candidates, all Republicans.

And the company's board has included the head of the Florida agency that oversees Medicaid, Dr. Andrew Agwunobi. Agwunobi was a director for six months before being picked to head the Agency for Health Care Administration. For his six months service on WellCare's board, Agwunobi received stock, which he sold for more than $1-million.

Current WellCare board members include former Florida Sen. Bob Graham and Ruben King-Shaw, former head of Florida's health agency and an ex-deputy chief at Medicare.

[8mmMauser]

Fred and Terri tar baby dailies...This from NRO!

That voice is fatherly, reassuring, calm. The contrast to Hillary couldn’t be sharper.

I’m going to say ‘well-briefed,’ but I know that will just spur one of the Thompson Associates to call me to tell me that’s not a sign of others briefing him, that’s a sign of Thompson’s own reading and study of the issues.

I was about to say that he was almost too conversational, that he could have used one quip or pithy summation at his views, and then, finally, at the tail end of his question on Schiavo, he summed up, “the less government, the better.”

When Fred Met Tim: Evaluating Thompson on Meet The Press

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[8mmMauser]

Dying to address the topic, in a thread by wagglebee:

The day will come. It may be 50 years from today or it could be next month but the day will arrive when you are sitting in a doctor’s office or lying in a hospital bed, when you’ll hear the words, “There’s little we can do for you. We will try to control your pain as much as possible.

“You are dying.”

You may already be picturing your last days and hours — at home, in your own bed, surrounded by your loved ones, free of pain, ready to go. But that vision is wishful thinking. Most of us will draw our last breath in a hospital bed. Some of us will die alone, while many will be lost in a medicated fog.

Genetic counselling and in vitro fertilization has revolutionized how life begins. Now many think Canada is overdue for an honest public debate about how life ends.

Debating euthanasia

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[Jim Noble]

Euthanasia: Those who know, don't say. Those who say, don't know.

The worst possible thing that could happen would be for euthanasia to be legalized.

No physician has ever been convicted of a crime for administering morphine to someone in pain at the end of their life. Never.

And Kervorkian was sent to prison.

Everything works fine.

[8mmMauser]

Fred and Terri tar baby dailies in a thread of their own by Canticle_of_Deborah:

Fred Thompson told Tim Russert on NBC’s Meet the Press Sunday that he DOES NOT support a Human Life amendment. That position is part of the GOP platform. Here’s what the 2004 GOP platform says:

"We must keep our pledge to the first guarantee of the Declaration of Independence. That is why we say the unborn child has a fundamental individual right to life which cannot be infringed. We support a human life amendment to the Constitution and we endorse legislation to make it clear that the 14th Amendment's protections apply to unborn children. Our purpose is to have legislative and judicial protection of that right against those who perform abortions." Here’s what Thompson said about it lifted from today’s Meet The Press transcript:

Fred Thompson says "No" to Human Life Amendment

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[syriacus]

Abortion isn't a religious issue

Someone tell this to the pro-aborts. They should stop insisting that opposition to abortion is completely based on religious belief.

Some of us oppose abortion because we believe that human conception results in a new human being (or multiple human beings). Human beings deserve protection at any stage of life.

[floriduh voter]

Dino Delaurentis’ relative, the chef, is expecting. I believe I was watching The Today Show and they showed the baby’s sonograms on NBC in various stages of development. I was shocked. Is NBC promoting life now or just chefs who are pg?

[floriduh voter]

Poor Mike Cowherd. If they ship him to a hospice, he’s toast. While healing takes time, assaults only take a few seconds.

[floriduh voter]

Evaluating Thompson: That article you linked to failed to mention Fred Thompson say, "Pull the feeding tube(s)."

So, I'd still like to know who's, when and where?

Fred Thompson fails biology with an "F". If we have a health crisis, God forbid, he'd get another "F".

[floriduh voter]

Debating euthanasia.

My advice is to get a long term care health plan where the insured gets to select their options for care. The worst thing is to end up having to forfeit everything to be stuck somewhere under Medicaid.

With staffing shortages, you can bet your last dollar, more people pass away on the weekends.

(and they aren't kept clean either).

Floridians need to have a plan or they'll be sorry. No, I don't sell long term care insurance but I strongly recommend it for Floridians so you can select where you want to be if you are unable to care for yourself.

Don't end up at Medicaid's mercy. Medicaid's good for the poor and the young but not for the elderly. That's my opinion. FV

[floriduh voter]

See my last re: your Dying to address thread.

[floriduh voter]

Wondrin’ if you like my new tag line. It sums everything up, ya think?

[floriduh voter]

ping

[floriduh voter]

THIS THREAD IS TERRI DAILIES News Digest for NOVEMBER, 2007. It’s the recognized FR anti-euthanasia category.

[bjs1779]

Someone tell this to the pro-aborts. They should stop insisting that opposition to abortion is completely based on religious belief.

There is nothing wrong that you say that, believe me.

[Sun]

You tag line nails it. And Chris Wallace, and various reporters, prove it.

[BykrBayb]

Okay, everybody act surprised now.

---

http://www.wthitv.com/Global/story.asp?S=7316704&nav=menu593_2

Cowherd died yesterday afternoon after his brother told hospital staff to take him off life support.

[Sun]

Prayers for all concerned.

I wonder what the life support was in this case.

[BykrBayb]

Another article said it took 15 minutes for him to die after being removed from life support. That sounds to me like suffocation.

[8mmMauser]

Sighhhh.... Why we must persevere,

[8mmMauser]

Fred Thompson today...

...............................

Washington, DC (LifeNews.com) -- Fred Thompson said in an interview on Sunday that he does not support the Republican Party's platform advocating a Human Life Amendment to the Constitution that would afford legal protection to unborn children and ban abortions. Thompson also reconfirmed he supports overturning the Roe v. Wade case that allowed abortions.

In an interview with Tim Russert on NBC's "Meet the Press" television program, Russert read Thompson the language of the GOP's pro-life platform.

He asked the Republican presidential hopeful, "Could you run as a candidate on that platform, promising a human life amendment banning all abortions?"

"No," Thompson replied. "No. I have always—and that’s been my position the entire time I've been in politics."...................

Fred Thompson Doesn't Back Amendment Banning Abortions, Wants Roe Reversed

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