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]

In hac lacrimarum valle, In this valley of tears...

It is so easy to see our battle against dark forces in the grimmest of terms. We fight a battle against bitter opponents and may figure ourselves justified in a serious frown or two.

Today, reflecting on Thanksgiving, I recall how T'wit would have put it, likely, with light humor, how much we all have and the abundance of grace for which we should be truly thankful.

In that lighter tone, I hope all will have a Thanksgiving like we intend here in the rainy, drippy gloom of Maine early winter, a cheer and optimism that life is pretty good and full of good friendships on our side of the street.

An optimistic Thanksgiving to all...

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[onedoug]

The prospective protection of Terri was one of the few decent things the government had ever done.

[floriduh voter]

The Frederalist is more concerned about a legal framework than about civil rights. Republicans can be for civil rights too. It's not a democrat issue. Terri was denied her civil rights.

Frederalist is for states' rights, not civil rights.

If the leader of the free world refuses to protect one person, they cannot protect anyone.

or his brother what's his name (Jebediah Pilate).

[Sun]

Welcome Harder-Kenemore, and Happy Thanksgiving to you and all my pro-life FRiends!

[8mmMauser]

Bill Press in WND...

................While in the long term, some moderate Republicans might welcome relief from having to genuflect in front of the pro-life movement and Terri Schiavo, the short-term political impact for the Republican Party is a disaster. Christian conservatives probably won't vote for a Democrat. They're more likely just to stay home. But the result is the same: Overnight, Republicans have lost their biggest and most loyal bloc of support. It's the political equivalent of Democrats losing support of the unions....................

The death of the religious right

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[8mmMauser]

Bill Press in WND...

................While in the long term, some moderate Republicans might welcome relief from having to genuflect in front of the pro-life movement and Terri Schiavo, the short-term political impact for the Republican Party is a disaster. Christian conservatives probably won't vote for a Democrat. They're more likely just to stay home. But the result is the same: Overnight, Republicans have lost their biggest and most loyal bloc of support. It's the political equivalent of Democrats losing support of the unions....................

The death of the religious right

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[8mmMauser]

Post Thanksgiving excitement created the double-tap.

[8mmMauser]

For what it is worth...

I have enough problems with images and Hillary and this doesn't help a bit.

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

Watching U.S. Sen. Hillary Clinton, D-N.Y., during the Democratic presidential debate at Drexel University cleverly straddling the issue of illegal aliens being given driver's licenses in New York was awesome. There was a haunting voice from the grave.

It was the late Courier-Post columnist Molly Ivins' article of Jan. 20, 2006, titled: "Not backing Hillary." Ivins said "I'd like to make it clear to the people who run the Democratic Party that I will not support Hillary Clinton for president . . .

"Enough. Enough triangulation, calculation and equivocation. Enough clever straddling, enough not offending anyone. This is not a Dick Morris election. Senator Clinton is apparently incapable of taking a clear stand on the war in Iraq, and that alone is enough to disqualify her. Her failure to speak out on Terri Schiavo, not to mention that gross pandering on flag-burning, are just contemptible little dodges."

Later Ivins said, "There are times when regular politics will not do, and this is one of those times. There are times a country is so tired of bull that only the truth can provide relief." Clinton's debate performance at Drexel shows nothing has changed and Ivins' words to be prophetical.

Straddling issue

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[8mmMauser]

I will be on a trip to Canada the next couple of days, will resume and catch up soon as access permits.

[floriduh voter]

The religious right isn't dead. lol Leave it to Bill Press to make an incorrect medical diagnosis. The GOP if it's going to be run by RINO/globalists is dead.

The true conservatives including the religious ones aren't dead, we're just not going to crawl on broken glass for RINOS any more.

[Sun]

“So where are all those GOPers who want pro-life, pro-family, low taxes, strong military and foreign policy, strong economy? They are cozying up to candidates who with multiple marriages who fudge on social values, from elite backgrounds who earned scads of money, who have no foreign policy or military experience - and who have lost lots of weight - and have Hollywood cred!”

http://paxalles.blogs.com/paxalles/2007/08/rep-duncan-hu-1.html

[Harder-Kenemore]

Thank you and I hope you, and everyone, had a Happy Thanksgiving as well!!

[8mmMauser]

Fred and Terri tar baby dailies...

They are lighter now, but persist. This from Clevelend Plain Dealer:

The National Right to Life Committee backed Fred Thompson, even though it disagreed with the former Tennessee senator on campaign finance reform and the Terri Schiavo case.

No one knows how much weight any of these endorsements - or endorsements in general - will carry with caucus and primary voters. It's notable that the candidate most faithful to the religious conservative agenda, former Arkansas Gov. Mike Huckabee, has no big-name backers. And yet the one-time Baptist preacher seems to be moving up in Iowa, where evangelicals may constitute 40 percent or more of the Republicans who turn out for the Jan. 3 caucuses.

Editorial: Even the GOP's prodigal sons win blessings from an atomized religious right

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[8mmMauser]

Bush's fault...

Anyone notice the Oliphant in the room?

With "Utter Incompetents," pundit Thomas Oliphant hands up a 320-page indictment of George W. Bush's presidency.

~Snip~

Oliphant devotes separate chapters to such topics as the Iraq war, tax policy, Hurricane Katrina, foreign policy, budget deficits, Terri Schiavo, Social Security, health care and so on. And that's where the trouble starts.

Utter Incompetents

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[8mmMauser]

Shout loud and long enough and lie becomes fact...

It notes an unusual feature of Oklahoma's legislation.

No other state mandates that if written documents do not exist expressing the patient's wishes, and if patients can no longer speak for themselves, doctors must assume the patient wants to be kept alive by extraordinary medical means. That disregards, Annette said, a study that found, after the very public case of Terri Schiavo and her long-term coma, that 80 percent of Americans do not want that kind of treatment.

There's never a good time to plan for your death

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[8mmMauser]

UN believable...

Thread by wagglebee:

NEW YORK, November 22, 2007 (C-FAM.ORG)- At a United Nations Population Fund (UNFPA) lecture at the UN on Tuesday, Dr. Gertrude Mongella, president of the Pan-African Parliament and former top UN official, praised UNFPA’s controversial promotion of “reproductive rights,” a term used by some UN committees to mean abortion, as a way to reduce the tragedy of maternal mortality even while admitting that the policy has failed to help women.

Mongella, a former UN under-secretary and special envoy on women’s issues and development, reported that the number of women dying from maternal causes in Africa had remained virtually unchanged from 1990 to 2005 and that in some parts of Africa, the maternal mortality rate continues to rise. She said that anywhere from 10-30% of this was due to unsafe abortions.

Former UN Official Compares Pregnancy to Slavery

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[8mmMauser]

Fading poinsettias in a thread by waglebee:

November 20, 2007 (LifeSiteNews.com) - Two years ago, San Diego based pro-life activist James Hartline used his on-line report to organize and promote a national boycott of Paul Ecke Ranch Christmas poinsettias due to the Ecke family's extensive history of financial support for abortion-giant Planned Parenthood (PP). Hartline is now claiming a major boycott victory. Recent local reports indicate that, since the 1920's, this will be the first year the principal poinsettia producer in the nation, Ecke Ranch, will not produce and sell their typically large crop of the festive Christmas plant.

The Ecke family's financial and ideological support of PP is well-documented and extends back through the years. Multiple members of the Ecke family are listed on the Planned Parenthood of San Diego's 2006 annual report within the 'Margaret Sanger Donor Circle'.

Pro-Lifer Claims Boycott Success Over Abortion Supporting Poinsettia Business

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[8mmMauser]

Sanger's goal pursued...

Thread by wagglebee:

Atlanta, GA (LifeNews.com) -- The new report the Centers for Disease Control released this week about annual abortion figures in the United States shows abortions continue to target black women moreso than other ethnic groups. The 2004 report also shows about 10 percent of all abortions in the United States are done with the dangerous RU 486 abortion drug.

The CDC shows a majority of women who get abortions are white (53 percent) compared with 35 percent done on African-Americans, 8 percent on women of other ethnic backgrounds and the race of the woman was unknown in four percent of the cases.

Report: Abortions Target Blacks, Repeat Abortions High, 10% Use RU 486

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[8mmMauser]

Sanger's goal perused...

VATICAN, November 21, 2007 (LifeSiteNews.com) - Pope Benedict XVI has again come out with strong statements condemning the culture of death and encouraging scientists, researchers, medical personnel and pastoral workers to respect the value of life in the face of growing demands to euthanize the elderly sick.

The Pope expressed his concern to participants of the 22nd international conference promoted by the Pontifical Council for Health Care, held last week, which focused on the pastoral care of elderly sick people.

Pope Warns Euthanasia is "Advancing Above All in Prosperous Societies"

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[8mmMauser]

Newspeak in a thread by wagglebee...

Discussion at the House of Commons Science and Technology Committee resulting in the report “Scientific developments relating to the Abortion Act 1967” and Pope Benedict XVI’s advice to Roman Catholic pharmacists to avoid any involvement, whether direct or indirect, in the supply of medicines used for abortions or euthanasia have raised the profile of issues surrounding abortion once again.

Whether we class ourselves as “pro-life” or “pro-choice”, the extremely high number of abortions carried out in England and Wales — 193,700 in 2006, an average of 3,725 per week — is a sad reflection of our society’s attempts to educate its members in the premise of “prevention is better than cure”.

While we are having some success with “stop smoking” campaigns , the Government’s answer to the increasing numbers of abortions is to make abortion more accessible by ending the need for two doctors’ signatures, allowing midwives and nurses to carry out first trimester abortions, including the administration and supply of abortifacients, and letting women have their abortions at home.

Abortion: A patient group direction too far?

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