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A federal judge has upheld health care fraud convictions of four former WellCare executives.
The former officials of the Tampa-based Medicare and Medicaid managed health care plans firm, convicted after a June 2013 jury trial, include: former CEO Todd Farha, convicted of two counts of health care fraud; former CFO Paul Behrens, convicted of two counts of making false statements relating to health care matters and two counts of health care fraud; William Kale, former vice president of Harmony Behavioral Health, a wholly-owned WellCare subsidiary, convicted of two counts of health care fraud; and Peter Clay, former vice president of medical economics, guilty of making false statements to a law enforcement officer.
The U.S. Court of Appeals for the Eleventh Circuit, according to a statement from the U.S. Attorney's office in Tampa, characterized the evidence of criminal intent in this case as “overwhelming” and rejected the defendants' characterization of their convictions as “the improper criminalization of routine contractual and regulatory disagreements.”
In May 2014, Farha was sentenced to 36 months in prison, Behrens to 24 months and Kale to one year and one day. Clay was to five years' probation, with no imprisonment. Farha, Behrens, and Kale have remained free pending the outcome of their appeal.
“At trial, the government proved that together the defendants participated in a fraudulent scheme to file false Medicaid expense reports that misrepresented and overstated the amounts [that WellCare subsidiaries Staywell Health Plan of Florida and HealthEase of Florida, Inc.] spent on medical services for Medicaid patients, specifically outpatient behavioral health care services,” the court wrote in its opinion. “By overstating these expenses, the defendants helped Staywell and HealthEase retain millions of dollars in tax-subsidized Medicaid funds that they should have refunded to the Florida Agency for Health Care Administration ('AHCA'). This, in turn, inflated the profits of Staywell, HealthEase, and WellCare and earned the defendants financial rewards.”
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