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Feds raid Medicare provider

Patient Financial Services Weekly Advisor, October 26, 2007

State and federal law-enforcement agents raided a Florida managed-care provider this week, causing the New York Stock Exchange to halt trading on the company's shares, according to a report in the Wall Street Journal.

It is not certain why the agents obtained a search warrant to raid WellCare Health Plans Inc., but the FBI, Health and Human Services Department and the Florida attorney general's Medicaid fraud unit participated in the raid.

WellCare provides Medicare and Medicaid plans for 2.3 million people. Most of WellCare's revenue comes from Medicare, the Journal reports. Its shares were cut in half the day after the raid.

Todd Farha, WellCare chief executive and chairman, told the Wall Street Journal the company's services have "remained operational and uninterrupted."

Healthcare officials say it is unclear when the government will release more details of its search. The Journal reports the industry faces criticism for its outsize growth.

WellCare owns more than a third of the market share in Florida. A private equity firm last year sold its WellCare stake for $870 million. It bought it for $220 million.

To read the full story in the Wall Street Journal, click here.

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