WellCare Resolves SEC Probe, To Pay $10 Million

   DOW JONES NEWSWIRES 
 

WellCare Health Plans Inc. (WCG) resolved an informal Securities and Exchange Commission probe of its accounting with an agreement to pay just over $10 million plus interest, as the company continues to clear its slate of fraud investigations.

"We are pleased that this matter has been resolved," said General Counsel Thomas F. O'Neil III. "From the outset, WellCare cooperated fully with the SEC, and we are committed to enterprise-wide regulatory compliance and ethical business practices."

In July, the WellCare board determined the company should restate financial statements to correct errors related to compliance with refund requirements in certain contracts.

Earlier this month, WellCare agreed to pay $80 million to settle Medicaid-fraud probes by the U.S. Attorney's Office for the Middle District of Florida and the Florida Attorney General's Office. The company is also in talks to resolve probes by the U.S. Department of Justice's civil division and U.S. Department of Health and Human Services.

Under the latest settlement, the provider of managed-care services for government-sponsored health-care programs will pay a civil penalty of $10 million and $1 for disgorgement. The first $2.5 million payment is due within 30 days. The settlement also enjoins any further violations.

WellCare noted it won't record any further charges related to the SEC probe beyond the $50 million reserve created in the first quarter for settling government probes. In the first quarter, the company swung to a loss as a result of that charge, while revenue increased 13%. The company also cited increased costs at its Medicare Advantage private fee-for-service plans, a market the company is exiting.

WellCare shares were recently up 4.1% at $17.21. The shares have rebounded strongly from a low of $6.12 in mid-November but remain off about two-thirds from their 52-week high last June.

-By Jay Miller, Dow Jones Newswires; 201-938-2331; [e-mail]