The Wall Street Journal-20080126-WellCare-s Chief Executive- 2 Other Top Officials Resign
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WellCare's Chief Executive, 2 Other Top Officials Resign
Three top executives of WellCare Health Plans Inc. stepped down late Friday, including Chairman and Chief Executive Todd Farha, and the company for the first time disclosed details of the three-month-old federal investigation into its operations.
The company said it believes the inquiry centers primarily on its Florida behavioral-health operations and on "the inter-company relationships between the company's various health plans and other wholly-owned subsidiaries." WellCare added that it hasn't been told the full scope of the inquiry.
Mr. Farha's duties have been assumed by two men, the company said. Former UnitedHealth Group Inc. and Oxford Health Plans Inc. executive Charles G. Berg is now the executive chairman, a new position, and WellCare adviser and former marketing executive Heath Schiesser was named CEO.
Chief Financial Officer Paul Behrens and General Counsel Thaddeus Bereday also stepped down, and the company is seeking replacements, WellCare said.
Attorneys for Messrs. Behrens and Bereday couldn't be reached for comment. A spokesman for Mr. Farha said he wasn't available to comment.
WellCare, which runs Medicare and Medicaid managed-care plans covering 2.3 million people, was raided on Oct. 24 by more than 200 federal and state agents. The Wall Street Journal reported in November that the inquiry centers at least in part on allegations that the Tampa, Fla., company inflated the amount it spent on mental-health care in order to keep money it should have refunded to Florida's Medicaid program. Among other questions, authorities are probing whether reinsurance arrangements with a Cayman Islands subsidiary allowed the company to misrepresent outlays for care.
The company has said it is cooperating with the probe, which is being led by the U.S. Attorney's office in Tampa, and that its board has received a preliminary report on an internal inquiry.
The Wall Street Journal reported Wednesday that Messrs. Farha, Behrens and Bereday were in talks with the board over their departures.
A person familiar with the talks said they were unrelated to any settlement negotiations.
