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WellCare Ex-CEO Faces Medicaid Fraud Trial

Danny Dougherty |

Nov. 2, 2012 2:43 PM |

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U.S. prosecutors will try former CEO Todd Farha and four executives of WellCare Health Plans Inc. early next year on charges of defrauding Medicaid. The government says the officials falsified spending data from 2003 to 2007 to circumvent a Florida law requiring managed-care companies to spend on patients at least 80 percent of Medicaid money allocated for mental health care. In that four-year period, Farha sold $57 million of WellCare stock as its share price rose sevenfold. Farha and the four others have pleaded not guilty. WellCare has paid $427.5 million in settlements to government agencies and company shareholders.

Read the full story: Fraud Trial for WellCare Ex-CEO Shows Medicaid Program Abuse

Scroll over charts below for figures. Select a highlighted point along the timeline for specific events.
Sources: Court filings, SEC documents and Bloomberg reporting
Stock holdings
Between the initial public offering in 2004 and the 2007 raid on WellCare's offices, Farha sold off about 718,000 shares of WellCare stock — about half of his holdings. By August 2006, more than a year before the raid, Soros Private Equity Investors LP/TowerBrook Investors LP had sold off or distributed all of its WellCare holdings.
The 80/20 rule
Florida requires insurance companies to spend at least 80 percent of Medicaid revenue for mental health care on patient expenses. Companies with more than 20 percent revenue and administrative expenses are required to issue refunds.
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