Qui Tam

FL Based Managed Care Firm comes under the microscope in False Claims Probe

By Brian F. LaBovick

Florida based  WellCare, a provider of government-sponsored health care programs such as Medicare and Medicaid, recently learned of a quitam action launched by a former employee. The matter is currently under seal, while the government is investigating the nature of the quitam claim.  According to the Federal False Claims Act Statute USC § 3730, the quitam complaint shall be filed in camera, shall remain under seal for at least 60 days, and shall not be served on the defendant until the court so orders. The Government may elect to intervene and proceed with the action within 60 days after it receives both the complaint and the material evidence and information. Therefore, Wellcare does not have all of the details of the quitam case. As previously mentioned in this Whistleblower Law Blog, a private citizen can file a suit in the name of the U.S. or State Government charging fraud by government contractors and other entities that receive or use government funds, and share in any funds the government recovers. 

WallStreet Journal Reporters, Heather Won Tesoriero and Theo Francis, uncovered more details on the quitam lawsuit filed by, a former financial-department employee of Harmony Behavioral Health, a WellCare subsidiary. According to the report, Wellcare allegedly defrauded the state-federal health-care program of more than $35 million over five years. This was based on an investigation into how the company collected funds for mental health services. The company was paid more for treating younger patients, which would be a  deceptive measure if the ages of patients were falsified. The company's Cayman Island unit is also coming under scrutiny for possibly inflating premiums and inflating expenses.

Amidst all the drama surrounding Wellcare, the stock recently had a surge in trading, according to a recent article by  Wall Street Journal reporter, Nick Timiraos.  After Wellcare acknowledged details about the whistleblower's termination, the investors seem to have settled down, stocks increased 39% to $38 and traded over 10 million shares. The shareholders must be breathing a sigh of relief. Wellcare announced that revenues increased 41% third quarter, compared to prior year's figures.  This is positive news for the investors.

All eyes are on the Florida Based Wellcare.  Will the whistleblower share in the government's reward, if this case is settled or goes to trial? Will the government recoup the alleged $35 million plus treble damages, if the company is found guilty of a quitam or false claims act violation?

Time will tell... Stay tuned...

Full post as published by Whistleblower Law Blog on November 06, 2007 (boomark / email).