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Posted on 10/25/2007 7:52:37 AM PDT by 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.
A man was on a ventilator in Tampa the last day or two and his family was fighting w/the docs and w/each other. The ventilator was unhooked and the patient continued breathing without it. (newsblurb from wfla 970 am radio early this morning). I was half asleep and didn’t catch the names. The family members were throwing stuff at the doctors and each other in the room. That’s what I call being pro-active.
Yes!
http://www.firstcoastnews.com/news/florida/news-article.aspx?storyid=97297
Photo: tampabays10.com
The one brother tackled mom who subsequently got the vent pulled. That’s brotherly love.
“Terri’s birthday was DECEMBER 3. Here are videos of Terri from TSSF.
http://terrisfight.org/pages.php?page_id=37 “
Thanks, I’ll save that link in my personal files.
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TAMPA, Fla. -- Police said a mother's decision to unplug a hospitalized man's ventilator prompted another son to attack her and another brother.
Maryln Frederick told police she decided Tuesday that her son's ventilator should be removed. According to an arrest report, Thomas Brackett believed she was trying to kill his brother, whom Brackett thought was improving.
Police said Brackett shoved his 70-year-old mother to the ground, then punched another brother, who uses a wheelchair. His mother wasn't injured, and his brother refused medical treatment at the scene.
Brackett is being held without bail on charges of battery of a person 65 or older, aggravated abuse of a disabled person and tampering with a witness.
Other relatives declined comment yesterday, except to say that the brother whose ventilator was removed was still alive.
Police: Family Fight Starts After Decision To Remove Ventilator
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BROCKTON— It was a year ago that 4-year-old Rebecca Riley died at her family's apartment in Hull after receiving overdoses of prescription drugs.
The child had been under the watch of the state Department of Social Services, and her death brought the agency under intense scrutiny.
Angelo McClain, a 50-year-old former social worker, became the new DSS commissioner in May in the aftermath of the Riley case.
In an interview in Brockton on Wednesday, he told The Enterprise that different practices at the agency could have helped save the girl's life..............................
DSS commissioner pledges change
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 McClain - Head of DSS |
By KYLE ALSPACH
GateHouse News Service BROCKTON - Something as simple as a computerized case summary could have made a difference in the life - and death - of 4-year-old Rebecca Riley, the new head of the state Department of Social Services said.
The girl’s death last December at her family’s apartment in Hull came after years of state involvement, Commissioner Angelo McClain said.
The agency had compiled a thick file of abuse-and-neglect complaints on the Rileys dating back to 2002. But social workers assigned to the case ‘‘had to go through reams and reams of case records’’ to get information about Rebecca, he said.
They could have made better decisions if they had a clearer view of what was going on in her life, something a case summary could have provided, McClain said.
~Snip~
Gov. Deval Patrick picked McClain to replace Spence in the wake of several high-profile cases, including the Rebecca Riley case.
DSS also had been criticized for its handling of the case of Haleigh Poutre, a young girl under DSS watch who was beaten into a coma in 2005, and Dontel Jeffers, a 4-year-old who was beaten to death that same year in a DSS foster home.
On Wednesday, Jeffers’ foster mother, Corinne Stephen, was sentenced to eight years in prison for the death.
Pledge for changes at DSS - Agency head: Better technology might have saved Rebecca Riley
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Coral Gables, FL (LifeNews.com) -- The Federal Election Commission gave Michael Schiavo’s political action committee a parting gift with another fine for failing to file thorough financial reports. The fine concerned an older financial report that Schiavo’s TerriPAC should have filed properly before he closed up shop in September.
Michael created the group to go after pro-life lawmakers who opposed his efforts to subject Terri to a painful two-week-long starvation and dehydration death in March 2005.
According to a Wednesday press release from the federal election agency, TerriPAC received a $137 fine regarding its 2006 12 Day pre-primary election report that covers the 20-day period just before the primary election.
FEC Fines Terri Schiavo’s Ex-Husband’s Political Action Committee Again
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TORONTO, December 6, 2007 (LifeSiteNews.com) - The American author of several highly acclaimed books on the life issues, Wesley J. Smith, spoke to the issue of "Future Concerns" at the Euthanasia Prevention Coalition's international symposium in Toronto, Canada on December 1st, 2007.
Speaking near the conference's conclusion, Smith brought together the themes of the various speakers in his presentation, highlighting several key developments in the strategy of the pro-euthanasia, assisted suicide lobby, and pointing out changes in medical practices touted in some of the leading medical journals and being implemented in a growing number of hospitals.
~Snip~
This naturally leads to the development of "Futile Care Theory" which moves the argument from the right of people to choose death to that of promoting the death of people who fail to meet the standards of the "Personhood Theory" approach to measuring the quality of life.
Smith summarized it with the line, "we want to put other people out of our misery."................
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The only place where I have heard this story is on FR. If there has been MSM coverage, I must have missed it.
I checked again this morning. Nope, that is still the only reference in the MSM about the case. It is news they don’t like to print.
Although fewer and farther between after the last debate, the tar baby dailies return.
Thompson has been tripped up by news events himself. In September, he said he was not aware that the Supreme Court had decided to hear arguments on the constitutionality of lethal injection.
Early in his campaign, Thompson sidestepped a question about the Terri Schiavo right-to-die case, saying he didn't remember the details.
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Wills never loses sight of contemporary affairs, and readers will have no doubt where his political sympathies lie. The book ends with a long attack on Bush, Karl Rove and their manipulation of religion in the interest of the Republican Party. He finds their use of the Terri Schiavo case particularly offensive, a form of pandering to religious extremists. By contrast he sees Barack Obama as a candidate whose ideas about the use of religion in politics are just right. A lengthy quotation from one of Obama’s speeches seems to affirm Wills’s views about the different roles churches and politicians should play in confronting problems, like AIDS, that have both moral and political dimensions. He ends with the argument that throughout most of the nation’s history, attempts to force particular religious views into political life have been beaten back. He interprets the outcome of the 2006 election as a rebuke to Rove’s theocratic tendencies.
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Heck with Huckabee
Slumping GOP candidate Fred Thompson dumped on Mike Huckabee yesterday, saying it was "surprising" the former Arkansas governor didn't know about the new intelligence report on Iran's nuclear weapons program.
The attack comes from a candidate who didn't know anything about the Jena 6 case, was at a loss for words when asked about Terri Schiavo, referred to Russia as the Soviet Union and wrongly insisted he guided Chief Justice John Roberts through the Democrat-controlled Senate - the GOP was in charge at the time.
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The scrutiny and missteps are similar to what Thompson, another Southerner with a sense of humor, went through earlier this year.
Visiting Florida in September as he launched his presidential bid, Thompson stirred controversy when he said he didn't know oil drilling in the Everglades was an issue and he wouldn't rule it out, and when he said he didn't remember the details of the Terri Schiavo right-to-die case.
Huckabee New in Spotlight, Finds It Hot
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Thompson has been tripped up by news events himself. In September, he said he was not aware that the Supreme Court had decided to hear arguments on the constitutionality of lethal injection as a means of execution. And early in his campaign, Thompson sidestepped a question about the Terri Schiavo right-to-die case, saying he didn't remember the details.
Today on the Presidential Campaign Trail
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Everything George Soros owns should be looked at - he’s ginning up the political connections for a reason...
The pro-life movement is divided in two between pragmatists who embrace incremental regulation, and radicals who reject incremental regulation in favor of full prohibition. The hostility between these factions is in some ways greater than the hostility between the pro-life and pro-choice movements.
Because 1990s clinic violence has put radicals in a difficult position, pragmatism is ascendant within the movement. Meanwhile, that same clinic violence, coupled with the Terri Schiavo debacle, has greatly reduced the influence of the pro-life movement as a whole within the Republican Party. One need only ask: How likely would it have been that pro-choice Rudy Giuliani would be leading the Republican pack ten years ago, regardless of his other credentials?
The Future of Abortion Rights in America
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