A recent raid by federal and state authorities on Tampa, Fla.-based health insurer WellCare was prompted by allegations that the company inflated mental health care spending so it could keep funds it should have refunded to the state's Medicaid program, according to a person familiar with details of the investigation, the Wall Street Journal reports (Won Tesoriero/Francis, Wall Street Journal, 11/3).
Agents from FBI, HHS and the Florida Medicaid Fraud Control Unit on Oct. 24 raided the headquarters of the insurer. Almost all of WellCare's $4 billion in revenue comes from federal and state governments. WellCare has been under scrutiny for several months. Georgia's Department of Community Health -- which administers Medicaid and PeachCare, the state's SCHIP -- also is investigating WellCare. It has been auditing payments to medical providers for the insurer, in addition to Amerigroup and Peach State Health Plan (Kaiser Daily Health Policy Report, 10/25).
Under Florida's Medicaid program, the state pays HMOs a fixed monthly rate for each beneficiary, regardless of the amount of medical services they receive. However, managed care providers are penalized if they do not spend at least 80% of the funds they receive for mental health care on treatment and are expected to refund remaining funds to the state, according to the Journal.