Skip to main content
Tampa Bay-Lakeland
Business Observer Tuesday, Jun. 11, 2013 7 years ago

Former WellCare execs face prison

The health care firm's legal counsel still faces related charges.

TAMPA — Four former executives of WellCare Health Plans were convicted Monday of charges related to Medicaid fraud.

In a highly watched federal trial in Tampa, a jury convicted Todd S. Farha, 45, of two counts of health care fraud, a charge that calls for a maximum of 10 years in prison.

Farha's CFO, Paul L. Behrens, 51, was also convicted of two counts of health care fraud, plus two counts of making false statements.

William L. Kale, 63, a former vice president of WellCare's Harmony Behaviorial Health Inc., was convicted of two counts of health care fraud. Peter E. Clay, 56, who was vice president of medical economics, was found guilty of making a false statement to law enforcement officers.

WellCare's former legal counsel Thaddeus M.S. Bereday still awaits trial. A date isn't yet set.

WellCare previously settled with the government and agreed to pay $80 million for its part in the Medicaid fraud scheme.

WellCare's former analyst, Gregory West, testified during the trial as part of a plea agreement with prosecutors. Whistle blower Sean Hellein, who received $21 million, wasn't called to testify.

This week's convictions send a signal that Medicaid fraud won't be tolerated, according to a press release from U.S. Attorney Robert E. O'Neill.

The jury returned not guilty verdicts on several counts and was unable to reach a verdict on others. The judge declared a mistrial on the deadlocked counts.

A federal grand jury had charged Farha, Behrens, Kale, and Clay with criminal violations in a scheme to defraud the Florida Medicaid program, from the summer of 2003 through the fall of 2007.

WellCare operates health maintenance organizations in Florida and elsewhere for government-sponsored health care benefit programs, including Medicaid. Two WellCare HMOs in Florida, StayWell and Healthease, contracted with the Agency for Health Care Administration, the Florida agency which administers the Medicaid program, to provide Medicaid recipients with various services, including behavioral health services. 

In 2002, Florida enacted a statute that required Florida Medicaid HMOs to spend 80% of the Medicaid premium paid for certain behavioral health services upon the provision of those services. If the HMO spent less than 80% of the premium, the difference was to be returned to AHCA. The WellCare executives falsely inflated expenditures in the company's annual reports to AHCA to reduce WellCare's contractual payback obligations.

“Medicaid recipients deserve quality, honest health care,” says Christopher B. Dennis, special agent in charge of health and human Services, Office of Inspector General, Office of Investigations, in the June 10 release. “Today's guilty verdicts should serve as a clear warning that anyone — no matter what their status — who defrauds the American people and abuses their trust will be brought to justice.”

The case was investigated by the U.S. Department of Health and Human Services, Office of Inspector General, the FBI and the Florida Attorney General's Medicaid Fraud Control Unit.

Charges were prosecuted by Assistant U.S. Attorneys Jay Trezevant and Cherie Krigsman, plus Department of Justice Senior Trial Attorney John Michelich and Special Assistant U.S. Attorney John Bowers.

Related Stories