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]

We remember Kenneth Connors as the advisor to whom Jeb didn't listen at the end.

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Evangelical leaders who once marshaled millions of votes for conservative presidential candidates going back to Ronald Reagan have lost their principles in this election cycle, the head of a conservative policy institute said this week.

In a presidential campaign in which conservative evangelicals find no home with any of the first-tier GOP candidates, influential conservatives like James Dobson, Tony Perkins and Paul Weyrich remain on the sidelines because they fear the loss of their reputations as kingmakers if they back a long-shot candidate like Mike Huckabee and then lose, said Ken Connor, founder of the Center for a Just Society, a policy center that advocates for conservative causes, especially in life and marriage issues.

"There are perceptions these guys are more concerned about being players than they are about principle," Connor said in an interview at New Orleans Baptist Theological Seminary.

Candidate natural choice

Connor was instrumental in defending a Florida law -- later reversed -- to prevent the removal of a feeding tube from Terri Schiavo, an unconscious patient whose care became the subject of a national bioethics debate in 2005.

Speaker laments leaders' absence in race... Top conservatives mum on candidates

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[8mmMauser]

Haleigh Poutre update...

"The Republican" leads the once more in the latest on the Haleigh Poutre saga.

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BOSTON - Inspired by the Haleigh Poutre abuse case, the state House of Representatives yesterday approved a bill to overhaul the operation of the state's child welfare system.

The House voted 154-0 to approve the bill. The legislation creates a cabinet-level secretary of child welfare, a 21-member advisory board on child abuse and neglect and changes the name state Department of Social Services to the Department of Children and Families.

The bill also gives the state social services department 15 days to investigate a report of suspected neglect or abuse - a so-called 51A report - up from the current 10 days. The 51A reports, considered preliminary, are filed with the department by medical professionals and other mandated reporters............................

House OKs child welfare overhaul

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[8mmMauser]

The Boston Globe mentions Haleigh too.

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BOSTON --House lawmakers unanimously approve a bill to toughen the state's child protection laws.

The bill sets minimum education requirements for social workers and increases criminal penalties if those legally required to report child abuse fail to do so.

It also creates a new cabinet secretary dedicated solely to child welfare and seeks to address racial disparities in the child welfare system.

The bill was prompted by the case of Haleigh Poutre, whose adoptive mother and stepfather were accused of beating her. Haleigh was hospitalized with severe brain injuries in 2005.

The Department of Social Services, which took custody of Haleigh, won court approval to remove Haleigh's feeding tube. The agency was criticized for acting too quickly after Haleigh showed signs of improvement.

House approves bill to strengthen child protection laws

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[8mmMauser]

It is another beautiful fall day here in the wilds of Maine, great for hunting, but no trolls in sight. I have a special tag this season for antlerless, either gender, since it is hard to tell the difference unless up close, but the horizon is clear right now. Seen any lately? Since trick or treat night, they are scarse.

[wagglebee]

It is another beautiful fall day here in the wilds of Maine, great for hunting, but no trolls in sight. I have a special tag this season for antlerless, either gender, since it is hard to tell the difference unless up close,

Are assault weapons allowed?

[8mmMauser]

It’s my weapon of choice except for long ranges, then my sporterized Mauser does it up to about three hundred yards or so. Luckily they are not fast moving targets, stand still and stomp in place so are ripe targets. Closer ones buzz around the zapper.

[wagglebee]

Maybe we could get a neutron bomb with a troll setting.

[floriduh voter]

OK Senator Coburn Deficit worse than abortion. (here we go again morally equivocating). Had those babies lived, they'd be paying taxes to be blunt.

http://thehill.com/leading-the-news/coburn-deficit-spending-is-bigger-moral-issue-than-abortion-2007-11-02.html

[floriduh voter]

THIS IS TERRI'S NOVEMBER DAILIES 2007. Ya'll come back now.

Freepers have been keeping tabs on euthanasia without let up since 2003. This is our FOURTH YEAR and yes, we vote! We are/were a big chunk of the GOP base.

We're here all month digesting pro-life news, Terri's legacy news, stupid politicians from both sides, current patients, etc.

Terri's Legacy Ping List: contact 8mmmauser to join. Pro-life ping list: contact wagglebee.

Terri Schindler Schiavo Foundation: www.terrisfight.org

WILL TO LIVE not LIVING WILL. You can thank us later... FV

[floriduh voter]

Georgia's running out of water fyi.

Terri just needed enough for herself but the legal system stated it was too much. Dehydration is painful and barbaric.

[wagglebee]

OK Senator Coburn Deficit worse than abortion. (here we go again morally equivocating). Had those babies lived, they'd be paying taxes to be blunt.

Had we not slaughtered an entire generation of 50 million babies, we would have no use for illegal aliens and Social Security would not be bordering on collapse.

But I agree that government spending is also out of control, so how about cutting all spending except defense by at least 25% and banning abortion.

[Sun]

“Senator Coburn Deficit worse than abortion.”

Do these people even have a heart?

[8mmMauser]

More about T'wit, Tim Wheeler...

Dr. Campbell sent us a note saying the tribute to Tim is now posted on their website in mp3. At the website click on Bill Campbell:

Dedication of Meeting to Tim Wheeler

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[8mmMauser]

A perspective from Garry Wills...

The first (awakening) in the 19th century, was a self-starting religiosity, didn’t depend on government. It was entirely self-financed, self-organized, self-supporting, so it had more life in it I think than the other ones. What broke it up was slavery.

In the 20th century ... the government was a bigger part of everyone’s life. So (evangelicals) tried to use the government to ban the sale of alcohol for instance, or ban the delivery of mail on Sunday or ban the teaching of evolution in school. When that happens, people get a little wary because of our tradition of separation of church and state. It’s more upsetting to a lot people, so that didn’t last as long.

The current one, I think, is running out of steam in about 10 years. You can see it running out of steam in the reaction to the Terri Schiavo case; the changed attitude towards gays; the growth of evangelical movement to protect the environment.

Enlightened and evangelical are cyclical, author says

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[8mmMauser]

Bobby Schindler will be in Kansas City...

"The Legacy of Terri Schiavo," presented by her brother, Bobby Schindler, 7 p.m. Nov. 11 at the Kansas City Downtown Library, 14 W. 10th St., Kansas City. $15 in advance. Register online at www.respectlifemissouri.org, or call Carrie at (816) 756-1850.

The Legacy of Terri Schiavo

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[8mmMauser]

Mor on Rudy!

Big Rudy surprise, well, sort of, in a thread by Sun.

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New York, NY (LifeNews.com) -- Over the last several months, pro-abortion Republican presidential candidate Rudy Giuliani has made adoption a hallmark of his campaign. He says adoption is his plan to combat abortions as president and that he reduced abortions as mayor, but a college professor says his archives show Giuliani never pushed it.

If Giuliani had an aggressive plan to reduce abortions in New York City -- long considered the abortion capital of America because it has more abortions than most states -- Fordham University political science professor Bruce Berg has never seen it.

That's surprising considering Berg has DVD copies of every mayoral news conference in the city dating back to 1996.

"They don't exist," Berg told the St. Petersburg Times of potential news conferences showing former Mayor Giuliani touting adoption over abortion.

In August, Giuliani made adoption one of his "12 Commitments to the American People" and claimed to have promoted it enough that it lowered abortions in the Big Apple..............

Rudy Giuliani's Mayoral Backing of Adoption Over Abortion Never Existed

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[8mmMauser]

Good news with adult stem cells in a thread by wagglebee...

Irvine, CA (LifeNews.com) -- A new study by researchers at the University of California, Irvine finds another advance in the use of adult stem cells. In this case, researchers used the stem cells from the brain of a mouse to restore memory following a brain injury.

The team used the neural stem cells to protect existing cells that were still healthy following the injury and to restore neuronal connections that had been damaged.

Adult Stem Cell Research May Lead to Treatments for Brain Injuries, Disease

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[floriduh voter]

Thanks for the t'wit mp3.

Meanwhile, over in the UK where socialized medicine rules the day, a little miracle.

http://www.dailymail.co.uk/pages/live/articles/news/news.html?in_article_id=491443&in_page_id=1770

As Terri Schinder Schiavo once said, "Where there's hope, there's life." (Judge Greer threw that quote out after he tampered with her words).

[floriduh voter]

www.sptimes.com

Wellcare announces in Saturday's edition that they have initiated an internal investigation. Interesting...

[floriduh voter]

As illustrated at World Net Daily. I didn't do the url cuz it's to their shop.

No doubt Terri's in this one. I think I'll get this one.