FBI raid shutters Medicare insurer (WellCare - formerly owned by George Soros)

St. Petersburg Times ^ | 10/25/07 | Kris Hundley

[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.

[8mmMauser]

But lest we forget, and think the leftists pushing embryonic stem cell research are now trumped, we err in presumption. The leftists were not about research to do good in the first place, but about an excuse to kill at will. They will be neither convinced nor ready to go quietly.

The scientist who helped ignite cultural and political controversy with the use of embryos in stem-cell research believes his new discovery – using ordinary adult skin cells – means the war is virtually over. "A decade from now, this will be just a funny historical footnote," James A. Thomson told the New York Times in an interview.

Thomson's laboratory at the University of Wisconsin was one of two that announced Tuesday a new way to turn ordinary human skin cells into what appear to be embryonic stem cells without using a human embryo.

The technique involves adding four genes to ordinary adult skin cells.

Scientist who ignited stem-cell war says it's over

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[8mmMauser]

Invaluable insight in this thread by Eternal Vigilance...

When I saw a column written by pro-life activist Jane Frantz in the Appleton Post-Crescent, it really took the wind out of my sails. She wrote about her epiphany in the pro-life movement following her own abortion, but she pointed out something that reminded me of the reasons why pro-lifers continue to tread water politically.

Frantz opined, "After three and a half decades, I wonder how much longer we can afford to do the same things, expecting different results."

Her observations about pro-lifers "authoring and defending woefully inadequate legislation" is but one of the problems we face on the political front, but I happen to think that it is precisely the politics of abortion that has drummed our message into oblivion.

~Snip~

A new strategy is called for; and to my mind, those who resist talking about it are the root cause of the problem. To them I would say: Get off the fence and join the battle to end the murder of America's future. The troops are moving out — with you, or without you.

(my bold)

Strategy for success evades pro-lifers

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[Sun]

I hope the religious right does their own research rather than follow their “leaders.”

[floriduh voter]

On Fox News Sunday, FT insulted New York (didn’t specify state or city) and he accused Fox News of having it in for him. George Stupidopolis did not exactly apologize about Terri Schiavo. What he did was CONTINUE THE LIES that we already knew. (Face the Nation)

[floriduh voter]

Fox bias against Fred?

http://thehill.com/leading-the-news/thompson-charges-fox-news-is-biased-against-his-campaign-2007-11-25.html

I don't think so.

[floriduh voter]

Florida Statute 765.309

Mercy Killing or euthanasia not authorized. (1) Nothing in this chapter shall be construed to condone, authorize, or approve mercy killing or euthanasia, or to permit any affirmative or deliberate act or omission to end life other than to permit the natural process of dying.

[Jim Robinson]

"The more government gets involved in healthcare, the more corrupt it will become."

And the higher the costs will be.

[wagglebee]

Yep, you look at the portion of the government expenses that go to health care in countries with socialized medicine and it is huge. If the government paid the highest insurance premium rates for private coverage for each person or family in their respective state of residence, it would be far less expensive than ANYTHING that the government can come up with. The ONLY thing Washington seems to be able to do consistently is to at least triple the cost of what something should be.

[Lesforlife]

http://www.time.com/time/nation/article/0,8599,1686729,00.html

[8mmMauser]

CBS...

They just can't help themselves, just have to start anything possibly positive by qualifying it and denigrating it with a bald faced lie. Hitler would have been impressed.

CBS) Two years ago, Terri Schiavo sparked a nationwide debate when she was removed from a feeding tube. Schiavo was in a permanent vegetative state with no chance of recovery. But there are as many as 300,000 other Americans who have survived brain injuries, only to be trapped in what's called a "minimally conscious state." They can't talk, walk, or eat, but they retain more mental awareness than vegetative patients.

For decades now, minimally conscious people have been all but written off by the medical establishment, warehoused in nursing homes, with little hope of recovery. But as CNN's Anderson Cooper reports, incredible new discoveries are changing the way doctors view these people.

Awakenings: Return To Life

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[8mmMauser]

Fred and Terri tar baby dailies...

They just won't let it rest! In this case, another projection. Turkeys call people they hate turkeys, stuff the lefties gobble up.

By emphasizing Thompson’s political potential, the anti-abortion group played down its own differences with Thompson, according to the Associated Press. An AP story out of Washington said: “Thompson has been at odds with the group because he doesn’t support a constitutional amendment outlawing abortion, a long-standing party platform plank; because he has called the Terri Schiavo right-to-die case a family matter; and because he backed campaign finance regulations that the group considers a restriction of free speech.”

~Snip~

In a recent interview, he also said Schiavo, the brain-damaged Florida woman who was allowed to die by a court in ’05, at the request of her husband, should have been kept alive.

Gray Panthers hand out annual Turkey Awards

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[8mmMauser]

The Colorado Right to Life people set the standards for the rest of us. It was written up in Time. This is their latest, taken from the post by Lesforlife above.

If Colorado for Equal Rights for Human Life and other anti-abortion groups can wrangle 76,000 signatures in the next six months, theirs could be the first state in the nation to vote on whether a fertilized egg should legally be considered a person. Despite resistance from abortion-rights groups, the Colorado Supreme Court on November 13 approved the ballot measure — 40 years after Colorado became the first state to relax abortion laws — giving a boost to a conservative political movement that has worked doggedly for decades to overturn Roe v. Wade. Colorado Right to Life spokesman Bob Enyart says, "Embryos are living human beings with eternal souls and spirits. You just have to refrain from killing one to see what a precious child it is."...........................

Should Fertilized Eggs Have Rights?

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[8mmMauser]

The thread by paltz shows an amazing example of embracing cognitive dissonance, attempting to cuddle two divergent views side by side and love them both. In this case, it is the Texas Supreme Court with this simple approach, cognitive dissonance for dummies. Thanks, narses, for the ping. If it is a fetus, what the heck, if mom wants to kill it, fine. Call it a baby and it becomes murder. Yup, I guess I have it straight now.

AUSTIN, Texas (AP) - Texas laws allow the killing of a fetus to be prosecuted as murder, regardless of the fetus' stage of development, but they do not apply to abortions, the state's highest criminal court has ruled...............

Texas Court: Fetus Death Can Be Murder

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[8mmMauser]

Ping to #413 above.

[Dante3]

BUMP

[floriduh voter]

I caught a little bit of sixty minutes last night. Anderson Cooper shows more interest in brain damage than the other talking heads. I hope this means he got some Terri questions for the you tube debate Wednesday. How could Anderson Cooper come to Pinellas County where history was made on the back of an innocent woman and her loving family and not mention it?

Well, at least Cooper does research, not just blather on like George Stupidopolous for the party of death, largely the democrat party.

[floriduh voter]

It's so hot here right now, the CNN crew will be sweating like pigs and the candidates will be running from their air conditioned limos to the buildings. "Never let 'em see you sweat".

I hope they do sweat a little bit during the debate Wednesday night. Somebody's gonna surge way ahead after St. Pete. It's time for someone to break away... imo.

If you see a dork with white hair in the front row, that's our governor. He wants to build a baseball stadium, another one while people are moving out and can't afford taxes, insurance, gasoline and other costs of living. Who's going to be able to afford to attend a Rays' game when people can't feed their families? or, pay for a new stadium? They still owe over 100 Million on the current stadium.

[floriduh voter]

By the way, the Marine who's in a coma after an August crash with Hulk Hogan's son had his guardianship hearing today.

His guardianship judge was a woman, not George Greer. (I wonder if sometimes people are REJECTING Judge Greer and getting to take the woman judge instead). I certainly would reject him. His orders are killers.

[floriduh voter]

Marine John Graziano remains in coma at James Haley VA Center in Tampa.

and, Hulk Hogan (Bollea) and his wife are getting a divorce. Linda filed in Pinellas via Beverly Hills. She wants half of everything. (and, John Graziano will be suing them both for lifetime nursing care. Of course, we pray that JG improves but his stem cell was mangled and he's totally on machines. His mother has custody and they're getting an independent guardian for him.

I assumed the guardianship hrg was in Pinellas but if JG is in Tampa, maybe the guardianship will be handled by a Hillsborough judge. I haven't paralegaled for awhile. I'd have to think about venue. These are the times I miss t'wit. He'd have the answer.

[Sun]

MSM kept telling the lie, that Terri was PVS, when he was NOT. I heard it every hour, or more, on the radio.

And too much of the American public bought the lie - they gave in to the brainwashing.

Now I’m seeing MSM repeatedly making it sound like the race is between Hillary and Rudy, tweedle dee, and tweedle dum. I hope the American public doesn’t give in to the brainwashing again.