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]

Our future is Hitler's past??

An advocate in Canada urges the implementation of the model established by Hitler cronies in this thread by wagglebee.

OTTAWA, November 8, 2007 (LifeSiteNews.com) - Robert Cushman, CEO of the Champlain Local Health Integration Network in eastern Ontario is mystified by reaction to an interview he gave to the Ottawa Citizen. While saying there needs to be open public discussion about how best to serve the needs of the aging baby boom generation, he said the debate should take place in the context of rising health care costs.

This has led to accusations that he is actually calling for a debate on euthanasia and the right to "die with dignity" as a matter of public policy.

Call For Right-To-Die Debate in Canada Elicits Condemnation and Denial

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[8mmMauser]

Thanks, TheSarce, for pinging us to this recent encroachment of the armies of death dealers. In the thread by Stoat, a new service puts Welcome Wagon and Meals on Wheels to shame and they innovate on the tried and true practices of Hitler's minions.

The controversial group which assists its clients to commit suicide has launched a service which has been nicknamed "death on wheels".

Dignitas has formed mobile teams which meet those who want to kill themselves at the location of their choice.

An official and a nurse then hand the client a lethal dose of chemicals which is taken intravenously or orally.

They later call police to report the suicide.

Death on wheels: The suicide service that comes to your door

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[8mmMauser]

I happened to watch this clip live on Fox as it unfolded. Canticle_of_Deborah has a thread on it and has pinged us. This event illustrates how quickly doctors can pull the "brain dead" card and get out the knives for spare parts harvests. (or so I suspect...)

Link to the video clip at the thread.

Medical Miracle (Brain Dead Man Wakes From Coma)

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[bjs1779]

I would say the goal is to make murder look more tidier to the average fool.

[8mmMauser]

I remember back in the mid ‘60’s checking out one of the places near Frankfurt they took handicapped children. It was like a gingerbread house from all appearance, a delightful place to see. I understood in the pre-war days kids were wheeled in and were never seen again. Tidy. Death dealers these days have tidy gingerbread words. Progress, it was, in their way of thinking.

[8mmMauser]

We have a case of praising with faint damns with candidate Huckabee. Begrudgingly the MSM sees a major endorsement coming his way and they undermine, trivialize Dr. Dobson who may issue it.

In the myopia of the left,God gathers the evangelicals like Robertson and takes a nice democratic vote to decide who prevails. They just don't get it.

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

Two pieces today give insights into the longshot presidential bid of Arkansas governor Mike Huckabee and the role of evangelical leaders in the Republican Party.

Michael Gerson notes Huckabee’s irritation that demonstrably less conservative opponents are garnering endorsements that should rightly be his.

When I asked former pastor and current presidential candidate Mike Huckabee his response to Pat Robertson’s endorsement of Rudy Giuliani, he paused for a moment. “Surprised” was his understated reply. But his frustration was quickly evident. “Our Web site went nuts with people saying they will never give money to Robertson again.”

“There is a disconnect,” he went on, “between past generational leaders in Christian conservatism and their own followers.” Note the word “past.”

~Snip~

An unsigned piece in The American Spectator, though, notes that Huckabee is about to get a very big endorsement.

Dr. James Dobson, who has largely been made irrelevant to the 2008 Republican presidential race, has apparently found his man, and according to an adviser, is ready to change the landscape of the Republican nomination race. “He is the leader of the evangelical and social conservative movement in America, and he’s going to reassert that position and leave no doubt that he’s in charge,” says the adviser based in Colorado.

~Snip~

The problem is that Mr Dobson is not all that good at politics. He displays all the characteristic weaknesses of evangelical politicos—overreaching hopelessly and then blaming failure on want of political courage. He was the prime force behind both the fight to keep Terri Schiavo’s feeding tube in place and the push for a gay-marriage ban. But a majority of evangelicals disapproved of the first and a large number of his fellow social conservatives warned, rightly, that the second was a waste of effort.

Huckabee and the Decline of the Religious Right

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[8mmMauser]

Since we know Duncan Hunter has been an outspoken advocate for Terri, it is worthwhile to check out the thread by good old days on his visit last night with Glenn Beck. I watched it live last night and find it uncanny how much he reminds me of Ronald Reagan.

His words were music to my ears.

Duncan Hunter for the full hour on Glenn Beck television show tomorrow (Friday)

But wait! There's more! The whole thing is on YouTube in another thread by WalterSkinner

Duncan on Glenn Beck (video)

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[floriduh voter]

davidosborne has a Duncan Hunter ping list. I also need to go to DH’s web site. He probably doesn’t know how much support he actually has. And, now that Rudy’s imploding....Duncan moves up??? McCain can’t win because he was for shamnesty.

[floriduh voter]

Candidates unwillingly fall on their swords as my tag line has become THEIR REALITY.

[floriduh voter]

You will luv this! Alberto Gonzales is going to speak at the university where Dr. Kevorkian was postponed. It was in today's www.sptimes.com or try www.tbo.com.

Thanks for nothing, Alberto. He's in the same crowd as Dr. K.

[floriduh voter]

That Cristi-critter is a bad actor in more ways than one.

[floriduh voter]

I think you have it. Pat cut a deal w/Rudy. However, now Rudy’s got Bernie Kerik problems. If allegations are true, that would make Pat Robertson look bad in addition to Rudy.

[floriduh voter]

HULK HOGAN SON MVA UPDATE: Marine John Graziano now resides at the VA facility in Tampa with a broken skull and comatose. His mom thinks he is slowly improving. Nick Bollea, the Hulkster's son turned himself in the other day. My friends talk of this mva more than I have but I have advised them that Nick Bollea's cares and troubles may all go away if they make a deal under the table with the scalliwag BERNIE MCCABE who refused to impanel a grand jury to investigate Terri Schiavo. BERNIE'S IN GREER'S POSSE.

http://www.judgegeorgegreer.com (McCabe and Greer are who's ruining the GOP).

[Diana in Wisconsin]

What? Wiggle room for fraud, waste and abuse in a Government program? I’m shocked. SHOCKED, I say! *SMIRK*

[floriduh voter]

I heard thru the grapevine that Jeb told Ken Connor to stop repping Jeb.

[Sun]

Let us know what Alberto talks about.

[Dante3]

McCabe and Greer - their day might come yet.

[Dante3]

Pat already looks bad. Some of his comments are absurd.

[Dante3]

BUMP

[8mmMauser]

Too bad, this story is abridged and unavailable without subscription. Here is all that is printed:

One of the most profound love stories of the twenty-first century has not been between a woman and a man, but between a woman and her siblings and parents. The entire country followed the story on a daily basis in the newspapers and on the television set.

Terri is dead, but her case survives

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