Bloomberg News

Ex-WellCare CEO Gets Three Years for Medicaid Scheme, U.S. Says

May 19, 2014

The former chief executive officer of WellCare Health Plans Inc. (WCG:US), who was found guilty of cheating Florida’s Medicaid program, was sentenced to three years in prison, federal prosecutors said.

Todd Farha was sentenced today in Tampa federal court for falsely inflating behavioral health expenses for Medicaid recipients, allowing the insurer to avoid refunding unused premiums to the state agency administering the program, prosecutors said.

Farha was convicted along with three other former WellCare executives of crimes stemming from the scheme in a federal crackdown on deceiving government-funded health programs. Farha was found guilty by a jury in June 2013 of two counts of health-care fraud, according to prosecutors.

From 2003 through 2007, Tampa-based WellCare failed to pay the state $40 million in refunds, according to the government. WellCare has paid out at least $427 million in settlements to government agencies and shareholders since 2007.

Under a 2002 law, health maintenance organizations like WellCare that help provide government health program benefits were required to spend 80 percent of Medicaid premiums for certain behavioral health services or else return the difference to a state administrator.

A lawyer for Farha, Douglas Titus, didn’t immediately return a call seeking comment on the sentencing.

The case is U.S. v. Farha, 11-cr-00115, U.S. District Court, Middle District of Florida (Tampa).

To contact the reporter on this story: Christie Smythe in Brooklyn at csmythe1@bloomberg.net

To contact the editors responsible for this story: Michael Hytha at mhytha@bloomberg.net Fred Strasser, Stephen Farr


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Companies Mentioned

  • WCG
    (WellCare Health Plans Inc)
    • $77.26 USD
    • 0.71
    • 0.92%
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