Last Februrary, Medicare fraud once again took center stage; a Tampa, FL-based managed care outfit was outed by the federal government for intentionally hiding Medicare payments in a specially created private entity called Harmony Behavioral Health. Citing administrative costs as the reason for diversion, WellCare Health kept for itself state funds meant for mental health services and delivery. If there were any reason in the heat of Obama’s reform rhetoric in 2009 to rail against the government’s mishandling of its own Medicare reimbursement policies (as part of shoddily run MA plans) as being part and parcel of the overall increase in the cost of healthcare delivery — it was quite apparent with this case.

Last year, this blog noted that

The Tampa, FL-based WellCare (which is the target of more than three times the nation’s average in beneficiary complaints) will temporarily suspend its operations by March 7 as it straightens things out. According to CMS, WellCare had “demonstrated a longstanding and persistent failure to comply” with federally-backed healthcare requirements. So, is it back to fee-for-service Medicare for current WellCare customers?

Perhaps it was a little premature to speculate on the party’s payment mechanism until its fate was determined. It didn’t take too much longer for WellCare to settle this case of blatant fraud. Last May, the managed care payer agreed to avoid a federal fraud conviction by agreeing to a deferred prosecution condition that $80M be paid out to Florida in restitution and in civil penalties. Also, the company initiated policies designed to shore up its internal corporate governance and ensure accurate and timely reports to federal and state agencies concerning its program information. Unfortunately, healthcare costs lost then saved by this episode are probably a drop in the bucket, but it shines as an example of the effects of corporate greed at the expense of beneficiaries’ access to healthcare.

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