DOW JONES NEWSWIRES 
 

Wellcare Health Plans Inc. (WCG) will pay $80 million as part of a deferred-prosecution agreement with state and federal officials to resolve allegations it tried to defraud Florida's Medicaid and Health Kids programs.

Shares jumped 16% to $18.17. The stock is up 41% this year, but remains far below the $128 level shares were at in October 2007 as agents of the Federal Bureau of Investigation, the Department of Health and Human Services and the Florida attorney general's Medicaid fraud unit raided WellCare's headquarters in Tampa.

The investigation centered at least in part on allegations WellCare inflated the amount it spent on mental-health care in order to keep money it should have refunded to Florida's Medicaid program.

Company executives on Tuesday expressed pleasure at agreeing to the deal, saying WellCare cooperated fully with the probe and has enacted various compliance efforts as a result.

The agreement with Florida and federal officials calls for WellCare to retain an independent monitor for 18 months. The company will pay $80 million as part of the deal, $35.2 million of which it paid last August. Another $25 million is due within one week of the agreement's finaization, with the remaining $19.8 million to be paid by year's end.

-By Kevin Kingsbury, Dow Jones Newswires; 201-938-2136; kevin.kingsbury@dowjones.com