Exhibit 10.1


 


TABLE OF CONTENTS


 


	
  Deferred
  Prosecution Agreement

  
	
  Statement
  of Facts

  
	
  Information

  



 


















	
  

  	
  Information [FILED STAMP]  UNITED
  STATES DISTRICT COURT MIDDLE DISTRICT OF FLORIDA TAMPA DIVISION  CASE NO. 8:09-cr-00203-T.27EAS  UNITED STATES OF AMERICA  v. 
  WELLCARE HEALTH PLANS, INC. 
  DEFERRED PROSECUTION AGREEMENT BETWEEN THE

  UNITED STATES ATTORNEY’S OFFICE FOR THE MIDDLE DISTRICT OF
  FLORIDA,

  THE FLORIDA ATTORNEY GENERAL’S OFFICE, AND

  WELLCARE HEALTH PLANS, INC., AND ITS AFFILIATES AND SUBSIDIARIES
  1. Parties and Effective Date: WellCare Health Plans, Inc., and its
  affiliates and subsidiaries, including but not limited to, Harmony Behavioral
  Health, Inc., Healthease of Florida, Inc., WellCare of Florida, Inc., Well
  Care HMO, Inc., Comprehensive Reinsurance, Ltd., and Comprehensive Health
  Management, Inc. (hereinafter, collectively identified as "WellCare"),
  the United States Attorney's Office for the Middle District of Florida
  ("USAO"), and the Florida Attorney General's Office (hereinafter,
  collectively identified as the “Offices"), are parties to this Deferred
  Prosecution Agreement ("DPA" or "Agreement"). The
  Effective Date of this Agreement shall be Tuesday, May 5, 2009. 2.
  Resolution: The Offices have agreed to permit WellCare to enter into this
  Agreement with the Offices in lieu of the Offices' pursuit of a criminal
  conviction of WellCare. In reaching this decision, the Offices have carefully
  weighed and considered WellCare's remedial actions to date, including its
  willingness to (a) undertake additional remediation as necessary; (b) accept
  and acknowledge responsibility for certain past conduct giving rise to this
  Agreement; (c) continue its cooperation with the Offices and other
  governmental agencies; and (d) demonstrate its good faith and commitment to
  full compliance with all federal and state health care laws. The Offices have
  also considered the potential impact upon current Florida health care program
  recipients,(1) and the possible adverse consequences to innocent WellCare
  employees and other WellCare stakeholders that could result from a conviction
  of WellCare. 3. Duration: The duration of this DPA shall be thirty-six months
  from the Effective Date of this Agreement. However, after a period of
  eighteen months, the USAO may agree to reduce the duration of this Agreement
  to a term of twenty-four months upon consideration of (a) WellCare's continued
  remedial actions; (b) WellCare's compliance with all federal and state health
  care laws and regulations; (c) the written Monitor's (1) Within this
  Agreement, the terms "recipient" and "beneficiary" are
  used interchangeably and are deemed to have the same meaning.  

  






 















	
  

  	
  Reports
  described below in paragraph 14 of this Agreement; and (d) WellCare's
  satisfaction of all obligations under this Agreement. 4.  Charging Document: On the Effective Date of
  this DPA, an Information will be publicly filed by the USAO in the United
  States District Court for the Middle District of Florida, Tampa Division,
  charging WellCare with conspiracy to commit health care fraud against the
  Florida Medicaid program in WellCare's reporting of expenditures under its
  80/20 community behavioral health contracts, and against the Florida Healthy
  Kids Corporation program under certain Florida Healthy Kids Corporation
  contracts, in violation of 18 U.S.C. § 1349. Said Information will be filed
  together with a legally executed Waiver of Indictment. 5.  Statement of Facts: WeIlCare agrees that a
  Statement of Facts, attached hereto as "Exhibit A," and this DPA
  will also be publicly filed by the USAO along with the Information and the
  Waiver of Indictment in the United States District Court for the Middle
  District of Florida, Tampa Division. WellCare acknowledges that it has read
  and understands the assertions contained within the Statement of Facts.
  WellCare further acknowledges that it has carefully considered all of the
  assertions contained within the Statement of Facts against facts gathered by
  the Special Committee of WellCare's Board of Directors during its own
  independent, internal investigation into the conduct at issue giving rise to
  this Agreement. 6.  Financial
  Component: WellCare received approximately $40 million in proceeds to which
  WellCare was not entitled as a result of its conduct under certain Florida
  Medicaid and Florida Healthy Kids Corporation program contracts. WellCare
  therefore agrees to pay to the USAO a total of $80 million plus accrued
  interest, the sum of which represents $40 million in restitution and $40
  million in civil forfeiture. The $40 million civil forfeiture will divest
  WellCare of the proceeds of such conduct and will be based upon the conduct
  detailed in the Statement of Facts, which will be an exhibit to the civil
  forfeiture complaint to be filed pursuant to Title 18, United States Code,
  Section 981(a)(1)(C). WellCare further agrees to sign any additional
  documents necessary to complete the civil forfeiture, including but not
  limited to a consent to forfeiture. The parties further agree that the $80
  million sum will be remitted to the USAO in three installment payments as
  follows: A. WellCare shall receive a credit against the $80 million sum of
  $35,200,000, which amount was remitted by WellCare to the USAO pursuant to an
  agreement executed on or about August 18, 2008, by the USAO, WellCare, and
  other parties. By entering into this Agreement, WellCare agrees to release
  any and all claims to any part of the $35,200,000 remitted to the USAO,
  including any interest earned thereon after August 18, 2008.

  






 















	
  

  	
  B. Within five
  business days of the Effective Date of this DPA, WellCare will make a payment
  of $25 million to the USAO, in accordance with wiring instructions to be
  provided to WellCare by the USAO. C. WellCare will make its best effort to
  pay the balance of the $80 million, or $19.8 million, as soon as possible. In
  any event, WellCare will pay the $19.8 million to the USAO no later than
  December 31, 2009, in accordance with wiring instructions to be provided to
  WellCare by the USAO. Further, WellCare agrees to pay to the USAO interest at
  a rate of .40% as of the Effective Date of this Agreement until full
  satisfaction of the $19.8 million. 7. 
  Deferral Recommendation: Within five business days of the Effective
  Date of this DPA, the USAO will recommend to the assigned United States
  District Court Judge that the prosecution of WellCare on the Information be
  deferred for the duration of this DPA. Except as otherwise provided for under
  this DPA, neither the Criminal Division of the USAO nor that component of the
  Florida Attorney General's Medicaid Fraud Control Unit responsible for
  investigating and prosecuting violations of Florida criminal law (hereafter
  referred to as "MFCU-Criminal Component"), will prosecute WellCare
  for any of the matters that have been the subject of the USAO's investigation,
  giving rise to this Agreement. 1 In the event that the Court declines to
  defer prosecution for any reason, all charges brought under the charging
  document will be dismissed without prejudice and this DPA will be null and
  void. However, any monies paid to the USAO by WellCare prior to the date the
  Court declines to defer prosecution will not be returned to WellCare and
  WeIlCare will make no claim upon such monies. 8.  Publication: Within five business days of
  the Effective Date of this DPA, WellCare will prominently post on its website
  the Information, this DPA, and the Statement of Facts, as referred to above
  in paragraphs 4 and 5 for the duration of this Agreement. WellCare agrees
  that it will not, through its attorneys, agents, officers, directors, trustees,
  employees, or any other person or vehicle, directly or indirectly, make any:
  (a) public statements, (b) filings, or (c) argument in any criminal or civil
  proceeding brought by the United States and/or either of the Offices,
  contradicting or undermining any statement or assertion made in this
  Agreement or Statement of Facts. 1 The matters that have been the subject of
  the Offices' investigation are

  specifically
  identified in a letter between the Offices and WellCare, dated May 5, 2009.

  






 















	
  

  	
  9. Commitment
  to Compliance and Remedial Measures: WellCare commits itself to exemplary
  corporate citizenship, best practices of effective corporate governance, the
  highest principles of honesty and professionalism, the integrity of the
  operation of all federal and state health care programs including Medicare
  and Medicaid, the sanctity of the doctor-patient relationship, and a culture
  of openness, accountability, and compliance. Prior to execution of this DPA,
  WeIlCare will provide a status report to the USAO on all policies and
  procedures, and all remedial measures, adopted to date by WellCare. To
  advance and underscore WellCare's commitment, WellCare further agrees: A. To
  fully cooperate with federal and state law enforcement agencies and federal
  and state health care regulatory agencies in matters arising from the
  Offices' continuing investigation of individuals responsible for the conduct
  giving rise to this Agreement. However, in accordance with Department of
  Justice (or "DOJ") policies, the Offices will not suggest or
  require that WellCare waive any of WellCare's legal privileges. B. To
  continue to develop and operate an effective corporate compliance and
  governance program, including adequate internal controls to prevent
  recurrence of any of the improper and/or illegal activities at issue in the
  investigation giving rise to this Agreement. C. To implement, within 60 days
  of the Effective Date of this DPA, updated policies and procedures designed to
  ensure complete and accurate reporting of all federal and state health care
  program information. D. To evaluate and revise WellCare's internal bid
  procedures and processes to ensure fair and accurate submission of all data
  and information in responses to any government bids and/or any government
  requests for proposals. 10.  Retention
  of Monitor: By the Effective Date of this DPA or later as allowed by the
  Offices, WellCare will retain, at its expense, an outside independent
  individual (the "Monitor") who will be selected by the USAO,
  consistent with

  






 















	
  

  	
  DOJ guidelines,
  and after consultation with WellCare. In selecting the Monitor, the USAO will
  engage in a process designed to (a) select a highly qualified and respected
  person or entity based on suitability for the assignment and all of the
  circumstances; (b) avoid potential and actual conflicts of interests; and (c)
  otherwise instill public confidence. WellCare agrees that it will not employ
  or be affiliated with any selected Monitor for a period of not less than one
  year from the date the monitorship is terminated. WellCare also agrees that
  if the Monitor resigns or is unable to serve the balance of his or her term,
  a successor Monitor shall be selected by the USAO, consistent with  DOJ guidelines, and after consultation with
  WellCare, within forty-five calendar days. WellCare agrees that all
  provisions in this Agreement that apply to the Monitor shall apply to any
  successor Monitor. 11.  Duration of the
  Monitorship: The duration of the monitorship shall be eighteen months from
  the Effective Date of this DPA. 12. 
  Notification by WellCare to Monitor: WellCare agrees to notify the
  Monitor and the USAO of any credible report or evidence of any wrongdoing by
  WellCare, its officers, employees and/or agents relating to compliance with
  any federal or state health care laws, regulations, and/or reporting
  requirements. At the request of the Monitor or the USAO, WellCare agrees to
  provide the Monitor and the USAO with all relevant non-privileged information
  concerning the allegations and report to the Monitor concerning any
  investigation it plans to conduct with respect to such evidence and any
  resulting disciplinary and/or remedial measures. Following completion by
  WellCare of its investigation, and in the event the Monitor reasonably
  concludes that the investigation was incomplete or otherwise deficient, the
  Monitor will identify to WellCare any deficiencies in its investigation and
  allow WellCare 30 days to cure. 13. 
  Role of Monitor: The Monitor shall have access to all non-privileged
  WellCare documents and information the Monitor determines are reasonably
  necessary to assist in the execution of his or her duties. The Monitor shall
  have the authority to meet with any officer, employee, or agent of WellCare.
  The Monitor will undertake to avoid the disruption of WellCare's ordinary
  business operations or the imposition of unnecessary costs or expenses to
  WeIlCare. The Monitor shall also, inter alia: A. Monitor and review
  WelICare's compliance with this DPA and all applicable federal and state
  health care laws, regulations, and programs. Within 30 days of retention, the
  Monitor shall meet with representatives of WellCare, the Offices, and the
  Securities and Exchange Commission ("SEC"), and thereafter develop
  a protocol to fully effectuate the Monitor's obligations herein. B. As
  requested by the Offices, fully cooperate with the Criminal and Civil
  Divisions of the Offices, 3 the United States Department of Justice Criminal
  and Civil Divisions, the FBI, the HHS-OIG, and the SEC, and, as requested by
  the USAO, provide information about WellCare's compliance with the terms of
  this DPA. 3 Specifically including the MFCU-Criminal Component.

  






 















	
  

  	
  C. Provide a
  total of three written reports to the USAO, that is one report every six
  months for the duration of the monitorship, as detailed more fully below in
  paragraph 14. D. Immediately report the following types of misconduct
  directly to the USAO and not to WellCare: (1) any misconduct that poses a
  significant risk to public health or safety; 4 (2) any misconduct that
  involves senior management of WellCare; (3) any misconduct that involves
  obstruction of justice; (4) any misconduct that involves a violation of any
  federal or state criminal statute, or otherwise involves criminal activity;
  or (5) any misconduct that otherwise poses a significant risk of harm to any
  person or to any federal or state entity or program. On the other hand, in
  instances where the allegations of misconduct are not credible or involve
  actions of individuals outside the scope of WellCare's business operations,
  the Monitor may decide, in the exercise of his or her discretion, that the
  allegations need not be reported directly to the USAO. E. Immediately review
  and evaluate policies and procedures relating to the topics described below,
  and make written recommendations as necessary to WellCare concerning: i The
  efficacy of policies and procedures relating to fairly, truthfully, and
  accurately accounting for and reporting of all revenues and/or expenditures
  and/or costs incurred in providing any services to federal and state health
  care program beneficiaries. ii. The efficacy of policies and procedures
  relating to true, accurate, and complete documentation of medical records
  pertinent to any health care services furnished by WellCare to federal and
  state health care program beneficiaries. iii. The efficacy of policies and
  procedures relating to the submission of true, accurate, and complete claims
  for payment to all federal and state health care programs, including the
  Medicare, Medicaid, and Florida Healthy Kids Corporation programs. iv. The
  efficacy of policies and procedures relating to the fair, truthful, and
  accurate preparation, certification, and submission of bids to all federal
  and state health care 4 The USAO will determine whether to also immediately
  report said misconduct to WellCare.

  






 















	
  

  	
  programs,
  including the Medicare, Medicaid, and the Florida Healthy Kids Corporation
  programs. v. The efficacy of training relating to the above topics, and on
  the obligation of each WellCare employee to ensure that, in dealing with all
  federal and state health care programs, any information provided to the
  health care programs is true, accurate, complete, and transparent. WellCare
  shall adopt all recommendations submitted to WellCare by the Monitor, unless
  WellCare objects to the recommendation. In that event, WellCare and the
  Monitor may present the issue to the USAO for its consideration and final
  decision, which is non-appealable. 14. Monitor's Reports: Every six months
  during the term of this DPA, the Monitor will prepare in writing a Monitor's
  Report to the senior management of WellCare and the Board of Directors, with
  a copy to the USAO. The first Monitor's Report to the USAO shall be due six
  months after the Effective Date of this Agreement. The Monitor's Report shall
  address the following: (a) WellCare's compliance with this Agreement and all
  applicable federal and state health care laws, regulations, and programs; (b)
  a summary of the Monitor's recommendations to WellCare during the reporting
  period concerning the topics identified in paragraph 13(E)(i-v) above, and
  WellCare's responses and/or performance in implementing the Monitor's
  recommendations; and (c) any other relevant information that the Monitor
  deems necessary to further the Monitor's obligations under this Agreement. The
  Monitor's Report to the USAO shall not be received or reviewed by WellCare
  prior to submission to the USAO. The Monitor's Report will be preliminary
  until WellCare is given the opportunity, within ten calendar days after the
  submission of the Monitor's Report to the USAO, to comment to the Monitor and
  the USAO in writing upon such Report, and the Monitor has reviewed and
  provided to the USAO a response to such comments, upon which such Report
  shall be considered final. WellCare agrees that the Monitor may disclose the
  Monitor's Report(s), as directed by the USAO, to any other federal and/or
  state law enforcement or regulatory agency in furtherance of an investigation
  of any other matters discovered by, or brought to the attention of, the USAO
  in connection with the USAO's continuing investigation or the implementation
  of this DPA. In such event, WellCare may identify any trade secret or
  proprietary information contained in any Monitor's Report, and request that
  the Monitor redact such information prior to disclosure. The Monitor shall
  fairly and in good faith consider WellCare's request to redact any
  information. However, the Monitor's decision, which is non-appealable, shall
  be based upon the Monitor's overarching obligations as set forth in this
  Agreement.

  






 















	
  

  	
  15. Additional
  Cooperation of WellCare: WellCare acknowledges and understands that its
  future cooperation is an important factor in the decision of the Offices to
  enter into this DPA, and WellCare agrees to continue to cooperate fully with
  the Offices, and with any other government agency designated by the USAO,
  regarding any issue about which WellCare has knowledge or information with
  respect to compliance with federal and state health care laws. More
  specifically, WellCare agrees that, during the term of this DPA, WellCare
  will: A. Consent to any order sought by the USAO permitting disclosure to the
  Civil Division of the United States DOJ of materials relating to compliance
  with federal health care laws that constitute "matters before the grand
  jury" within the meaning of Federal Rule of Criminal Procedure 6(e)
  (with protection for any trade secrets). B. Take reasonable steps to make
  available current WellCare officers and employees to provide information
  and/or testimony at reasonable times as requested by the Offices, with
  respect to matters that have been the subject of the Offices' investigation
  leading to this DPA. WellCare will not be required to request that these
  individuals forgo seeking the advice of an attorney or act contrary to that
  advice. C. Disclose all non-privileged information about which the Offices
  may inquire with respect to matters that have been the subject of the
  Offices's investigation leading to this DPA. D. Provide prompt, complete and
  truthful testimony, certifications, and/or other non-privileged information,
  as required by the Offices, necessary to identify or establish the location,
  authenticity or evidentiary foundation to admit into evidence documents in a
  criminal or other proceeding relating to matters that have been the subject
  of the Offices' investigation leading to this DPA.  16. Breach of Agreement: A. Should WellCare
  commit a health care offense in violation of federal and/or state criminal
  law subsequent to the effective date of this DPA, WeIlCare will immediately
  and without notice be subject to federal and/or state prosecution, and
  WellCare will be in material breach of the DPA. B. Otherwise, should the USAO
  determine that WellCare has knowingly and willfully breached a material
  provision of this DPA, the USAO will provide WellCare with written notice of
  the alleged breach. WellCare will have 30 days following receipt of such
  notice, or such longer period as the parties

  






 















	
  

  	
  may agree, to
  demonstrate that no breach occurred, that the breach was not material, or
  that the breach was not knowingly and willfully committed. C. If the USAO, in
  its sole discretion, determines: (i) That WellCare has materially breached
  this DPA in the manner described above in paragraph A of this section, or
  (ii) That WellCare has knowingly and willfully breached a material provision
  of this DPA in the manner described above in paragraph B of this section
  after WellCare has had the opportunity to demonstrate that no breach
  occurred, that the breach was not material, or that the breach was not
  knowingly and willfully committed, then the USAO may proceed with the
  prosecution of WellCare through the filed Information or otherwise, as
  determined solely by the USAO. Further, the USAO may utilize the Statement of
  Facts, referred to above in paragraph 5, in any such prosecution. Should
  there be a prosecution in accordance with this Agreement, WellCare agrees
  that upon such prosecution: (1) WellCare, through its attorneys, agents,
  officers, directors, trustees, employees, or any other person or vehicle,
  will not refute in any way or manner, directly or indirectly, any of the
  assertions contained within the Statement of Facts; (2) WellCare and its
  counsel will stipulate that the Statement of Facts is admissible in any such
  prosecution as evidence against WellCare pursuant to Federal Rule of Evidence
  801(d)(2)(A),(B),(C), and (D); (3) WellCare and its counsel will stipulate
  that the Statement of Facts is true and correct and that the Statement of
  Facts may be read to the jury or other fact-finder in whole or in part, as
  elected by the USAO, as a stipulation to which the parties have agreed; and
  (4) the admissibility of the Statement of Facts is not barred or prohibited
  in any way or manner by the Federal Rules of Evidence, specifically including
  Federal Rule of Evidence 410, by the Federal Rules of Criminal Procedure,
  specifically including Rule 11, or by any other means. Nothing in this
  paragraph shall be construed as an acknowledgment that this Agreement and/or
  the Statement of Facts are admissible or may be used in any proceeding other
  than a proceeding brought by the Offices following a breach as described in
  this paragraph 16. D. Regardless of whether the USAO pursues criminal charges
  against WellCare upon any breach of the DPA, any monies paid to the USAO at
  any time by WellCare will not be returned to WellCare and WellCare will make
  no claim upon such monies.

  






 















	
  

  	
  E.  All parties agree and acknowledge that,
  except in the case of a material breach of this DPA, all investigations of
  WellCare relating to the filed Information, and to all other matters that
  have been investigated by the USAO prior to the date of this DPA, will not be
  pursued further as to WeIlCare by the USAO Criminal Division nor by that
  component of the Florida Attorney General's Medicaid Fraud Control Unit
  responsible for investigating and prosecuting violations of Florida criminal
  law, 5 but will continue as to any and all individuals bearing responsibility
  for any violations of federal and/or state health care laws. Nothing in this
  paragraph is to be read or construed as stating, suggesting, or implying that
  this DPA in any way limits the ongoing investigations being conducted by the
  Offices' Civil Divisions and/or components, the Civil Division of the DOJ, or
  any other federal or state office, agency, or department. 17. Tolling
  Agreement. Waivers and Limitations: WeIlCare expressly waives all rights to a
  speedy trial pursuant to the Sixth Amendment of the United States
  Constitution, Title 18, United States Code, Section 3161, Federal Rule of
  Criminal Procedure 48(b), and any applicable Rules of The District Court of
  The United States For The Middle District of Florida, and pursuant to Rule
  3.191, FLA. R. CRIM. P., for the period that this DPA is in effect for any
  prosecution of WeIlCare. The parties agree that any statutes of limitations
  applicable to the Offices' investigation leading to this Agreement shall be
  tolled as of the Effective Date of this Agreement, and that WeIlCare hereby
  waives any and all rights to claim the period between the Effective Date of
  this Agreement and any prosecution brought by the USAO pursuant to paragraph
  16 of this Agreement, as a bar to prosecution, in any claim that the statute
  of limitations has expired for offenses charged against WeIlCare related to
  the subject matter of the investigation giving rise to this Agreement. The
  subjects covered by the tolling of the applicable statutes of limitations
  include any and all alleged violations of any Title of the United States
  Code, specifically including any and all alleged violations of Title 18
  involving WeIlCare that are within the scope of said investigation. This
  waiver is knowing and voluntary and in express reliance on the advice of
  counsel. Any such waiver shall terminate upon final expiration of this DPA. 5
  The matters that have been the subject of the Offices' investigation are

  specifically
  identified in a letter between the Offices and WeIlCare, dated May 5, 2009.

  






 















	
  

  	
  18.  No Sale or Transfer of WellCare Prior to
  Full Satisfaction of the Financial Component: Prior to full satisfaction of
  the Financial Component of this Agreement as described in paragraph 6 above,
  WellCare agrees that it will not sell all or substantially all of WelICare's
  business operations as they exist as of the Effective Date of this Agreement
  to a single purchaser or group of affiliated purchasers during the term of
  this Agreement, or merge with a third party in a transaction in which
  WellCare is not the surviving entity, without the express written permission
  of the Offices. 19.  Transferability of
  DPA: Absent the express written consent of the Offices to conduct itself
  otherwise, WellCare agrees that if, after the Effective Date of this
  Agreement, WellCare sells all or substantially all of WellCare's business
  operations as they exist as of the Effective Date of this Agreement to a
  single purchaser or group of affiliated purchasers during the term of this
  Agreement, or merges with a third party in a transaction in which WellCare is
  not the surviving entity, WeIlCare shall include in any contract for such
  sale or merger a provision binding the purchaser, successor, or surviving
  entity to the obligations contained in this Agreement. 20.  Other Proceedings: A. WellCare specifically
  agrees that this DPA in no way restricts the ability of the USAO or the
  MFCU-Criminal Component from proceeding against any individual in any
  capacity. B. WellCare also specifically agrees that this DPA in no way limits
  or precludes the United States and/or either of the Offices from instituting,
  maintaining, or intervening in any action or other proceeding to recover any
  civil or administrative monetary or other remedy or penalty. 21.  Dismissal of Charging Document: The Offices
  agree that if WellCare has complied with this DPA, within 5 days of the
  expiration of the DPA, the USAO will seek dismissal with prejudice of the
  Information filed pursuant to paragraph 4 above. 22.  Expressed Limitation of the Agreement: The
  agreement between the parties expressed in this DPA in no way limits or
  waives WellCare's contractual obligations to any federal or state health care
  agency or program, except as expressly provided herein.

  






 















	
  

  	
    23. Entire Agreement: This DPA constitutes
  the full and complete agreement between WeIlCare and the Offices and
  supersedes any previous agreement between them. No additional promises,
  agreements, or conditions have been entered into other than those set forth
  in this DPA, and none will be entered into unless in writing and signed by
  the Offices, WeIlCare counsel, and a duly authorized representative of
  WeIlCare. It is understood that the Offices may permit exceptions to or
  excuse particular requirements set forth in this DPA at the written request
  of WeIlCare or the Monitor, but any such permission shall be in writing.
  AGREED & ACCEPTED BY: WELLCARE HEALTH PLANS, INC. 

  GREGORY W.
  KEHOE, ESQ. Greenberg Traurig, P.A. Attorney for WellCare Health Plans, Inc. 

  THOMAS F.
  O’NEIL III Secretary WellCare Health Plans, Inc.  

  UNITED STATES
  OF AMERICA A. BRIAN ALBRITTON United States Attorney Middle District of
  Florida /s/ JAY G. TREZEVANT JAY G. TREZEVANT Assistant United States
  Attorney Middle District of Florida /s/ ANTHONY E. PORCELLI ANTHONY E.
  PORCELLI Assistant United States Attorney Middle District of Florida STATE OF
  FLORIDA /s/ SCOTT FARR SCOTT FARR Regional Chief Office of Attorney General

  






 















	
  

  	
    23. Entire Agreement: This DPA constitutes
  the full and complete agreement between WeIlCare and the Offices and
  supersedes any previous agreement between them. No additional promises,
  agreements, or conditions have been entered into other than those set forth
  in this DPA, and none will be entered into unless in writing and signed by
  the Offices, WeIlCare counsel, and a duly authorized representative of
  WeIlCare. It is understood that the Offices may permit exceptions to or
  excuse particular requirements set forth in this DPA at the written request
  of WeIlCare or the Monitor, but any such permission shall be in writing.
  AGREED & ACCEPTED BY: WELLCARE HEALTH PLANS, INC. 

  /s/ Gregory W.
  Kehoe, Esq

  GREGORY W.
  KEHOE, ESQ. Greenberg Traurig, P.A. Attorney for WellCare Health Plans, Inc. 

  /s/ Thomas F.
  O’Neil III 

  THOMAS F.
  O’NEIL III Secretary WellCare Health Plans, Inc.  

  UNITED STATES
  OF AMERICA A. BRIAN ALBRITTON United States Attorney Middle District of
  Florida JAY G. TREZEVANT Assistant United States Attorney Middle District of
  Florida ANTHONY E. PORCELLI Assistant United States Attorney Middle District
  of Florida STATE OF FLORIDA SCOTT FARR Regional Chief Office of Attorney
  General

  






 















	
  

  	
    DIRECTOR'S CERTIFICATE I have read this
  agreement and carefully reviewed every part of it with counsel for WeIlCare.
  I understand the terms of this Deferred Prosecution Agreement and voluntarily
  agree, on behalf of WeIlCare, to each of the terms. Before signing this
  Deferred Prosecution Agreement, I consulted with the attorneys for WeIlCare.
  Counsel fully advised me of WellCare's rights, of possible defenses, of the
  Sentencing Guidelines' provisions, and of the consequences of entering into
  this Deferred Prosecution Agreement. No promises or inducements have been
  made other than those contained in this Deferred Prosecution Agreement.
  Furthermore, no one has threatened or forced me, or to my knowledge any
  person authorizing this Deferred Prosecution Agreement on behalf of WellCare,
  in any way to enter into this Deferred Prosecution Agreement. I am also
  satisfied with counsel's representation in this matter. I certify that I am a
  director of WeIlCare, and that I have been duly authorized by the Board of
  Directors of WeIlCare to execute this certificate on behalf of WellCare. 

  /s/ Charles G.
  Berg 

  CHARLES G. BERG
  Executive Chairman of the Board of Directors WeIlCare Health Plans, Inc.

  






 















	
  

  	
  CERTIFICATE OF
  COUNSEL I am counsel for WellCare. In connection with such representation, I
  have examined relevant WellCare documents, and have discussed this Deferred
  Prosecution Agreement with the authorized representative of WellCare. Based
  on my review of the foregoing materials and discussions, I am of the opinion
  that: 1.  The undersigned counsel is
  duly authorized to enter into this Deferred Prosecution Agreement on behalf
  of WellCare; and 2.  This Deferred
  Prosecution Agreement has been duly and validly authorized, executed and
  delivered on behalf of WellCare, and is a valid and binding obligation of
  WellCare. Further, I have carefully reviewed every part of this Deferred
  Prosecution Agreement with the Directors of WellCare. I have fully advised
  these Directors of WellCare's rights, of possible defenses, of the Sentencing
  Guidelines' provisions, and of the consequences of entering into this
  Agreement. To my knowledge, WellCare's decision to enter Into this Agreement
  is an informed and voluntary one. 

  

  /s/ Gregory W.
  Kehoe

  GREGORY W.
  KEHOE, ESQ. Greenberg Traurig, P.A. Attorney for WellCare Health Plans, Inc.

  






 















	
  

  	
  SECRETARY'S
  CERTIFICATION I, THOMAS F. O'NEIL Ill, the duly elected Secretary of
  WeIlCare, a corporation duly organized under the laws of the State of
  Florida, hereby certify that the following is a true and exact copy of a
  resolution approved by the Board of Directors of WeIlCare following a meeting
  of the Board; WHEREAS, WeIlCare has been engaged in discussions with the
  USAO-MDFL in connection with an investigation being conducted by the
  USAO-MDFL; WHEREAS, the Board of Directors of WeIlCare consents to resolution
  of these discussions on behalf of WeIlCare by entering into this Deferred
  Prosecution Agreement that the Board of Directors has reviewed with outside
  counsel representing WeIlCare; NOW THEREFORE, BE IT RESOLVED that outside
  counsel representing WeIlCare from Greenberg Traurig, P.A. be, and they hereby
  are authorized to execute the Deferred Prosecution Agreement on behalf of
  WeIlCare substantially in the same form as reviewed by the Board of Directors
  during a meeting of the Board, and that a Director of WeIlCare is authorized
  to execute the Director's Certificate for the Deferred Prosecution Agreement.
  IN WITNESS WHEREOF, I have her unto signed my name as Secretary and affixed
  the Seal of said Corporation this 4th day of May, 2009. 

  /s/ Thomas F.
  O’Neil III 

  THOMAS F.
  O’NEIL III Secretary WellCare Health Plans, Inc.

  






 















	
  

  	
  CERTIFIED COPY
  OF RESOLUTION Upon motion duly made, seconded, and carried by the affirmative
  vote of all the Directors present, with one abstaining, the following resolutions
  were adopted: WHEREAS, WellCare has been engaged in discussions with the
  United States Attorney's Office for the Middle District of Florida
  ("USAO-MDFL") in connection with an investigation being conducted
  by the USAO-MDFL; WHEREAS, the Board of WellCare consents to resolution of
  these discussions by entering into a deferred prosecution agreement that the
  WellCare Board of Directors has reviewed with outside counsel representing
  WellCare; NOW THEREFORE, BE IT RESOLVED that outside counsel representing
  WellCare from Greenberg Traurig, P.A., be, and they hereby are, authorized to
  execute the Deferred Prosecution Agreement on behalf of WellCare
  substantially in the same form as reviewed by the WellCare Board of Directors
  during a meeting of the Board, and that a Director of WellCare is authorized
  to execute the Director's Certificate for the Deferred Prosecution Agreement.

  






 












Statement of Facts




	
  

  	
  UNITED STATES DISTRICT COURT MIDDLE DISTRICT OF FLORIDA
  TAMPA DIVISION UNITED STATES OF AMERICA v. CASE NO. 8:09-cr WELLCARE HEALTH
  PLANS, INC. STATEMENT OF FACTS 1. Beginning in or about mid-2002, and
  continuing through at least October 2007, within the Middle District of
  Florida, and elsewhere, WELLCARE HEALTH PLANS, INC. (formerly doing business
  as Wellcare Holdings, LLC, and also known as WCG Health Management, Inc.,
  referred to herein as "WELLCARE"), acting through its former
  officers and employees, knowingly and willfully conspired, confederated and
  agreed with others to execute and attempt to execute a scheme and artifice to
  defraud two health care benefit programs: the Florida Medicaid program and
  the Florida Healthy Kids Corporation ("FHKC") program.
  Additionally, WELLCARE knowingly and willfully conspired, confederated and
  agreed with others to defraud the Florida Medicaid program of approximately
  $33,649,553 and the FHKC program of approximately $6,395,500 by means of
  materially false pretenses, representations, and promises in connection with
  the delivery of and payment for health care benefits, items, and services.

  






 















	
  

  	
  The Florida Medicaid Program  2. The Medicaid program, as established by
  Title XIX of the Social Security Act and Title 42 of the Code of Federal
  Regulations, authorized Federal grants to States for medical assistance to
  low-income persons who are blind, disabled, or members of families with
  dependent children or qualified pregnant women or children (herein referred
  to as "Medicaid beneficiaries" or "Medicaid recipients").
  The Centers for Medicare and Medicaid Services ("CMS"), previously
  known as the Health Care Finance Administration ("HCFA"), was an
  agency of the United States Department of Health and Human Services
  ("HHS"), and was the federal governmental body responsible for the
  administration of the Medicaid program. CMS, in turn, authorized each state
  to establish a state agency to oversee the Medicaid program.  3. The Florida Medicaid program was
  authorized by Chapter 409, Florida Statutes, and Chapter 59G, Florida
  Administrative Code. Florida further established the Agency for Health Care
  Administration ("AHCA") as the single state agency authorized to
  administer the Florida Medicaid program. 
  4. States electing to participate in the Medicaid program had to
  comply with the requirements imposed by the Social Security Act and
  regulations of the Secretary of HHS. 5. The federal government reimbursed
  states for a portion of the states' Medicaid expenditures based on a formula
  tied to the per capita income in each state. The federal share of Medicaid
  expenditures (otherwise referred to as "federal financial
  participation" or "FFP") varied from a minimum of 50% to as
  much as 83% of a state's total Medicaid expenditures. The federal
  government's "financial participation" in the

  






 















	
  

  	
  Florida Medicaid program equaled approximately 59% of
  Florida's total Medicaid expenditures. 
  6. The Florida Medicaid program reimbursed health care practitioners,
  healthcare facilities, or health care plans that met the conditions of participation
  and eligibility requirements and that were enrolled in Medicaid for rendering
  Medicaid-covered services to Medicaid beneficiaries.  7. "Capitation reimbursement" was
  one of several ways that the Florida Medicaid program reimbursed health care
  providers, including health maintenance organizations ("HMOs") such
  as WELLCARE. "Capitation reimbursement" was a form of payment where
  HMOs and other providers were paid a fixed amount each month for each
  beneficiary or member (per capita) enrolled to receive services from that HMO
  or provider.  8. Florida sought to
  provide certain behavioral health care services to the Florida Medicaid
  program beneficiaries, and in 2002 enacted Florida Statute 409.912(4)(b),
  which provided, in pertinent part:  To
  ensure unimpaired access to behavioral health care services by Medicaid
  recipients, all contracts issued pursuant to this paragraph shall require 80
  percent of the capitation paid to the managed care plan, including health
  maintenance organizations, to be expended for the provision of behavioral
  health care services. In the event the managed care plan expends less than 80
  percent of the capitation paid pursuant to this paragraph for the provision
  of behavioral health care services, the difference shall be returned to the
  agency.  Beginning in or about
  mid-2002, AHCA began covering certain behavioral health care services, and it
  provided these services through contracts with HMOs, such as

  






 















	
  

  	
  WELLCARE, which included provisions for the new services
  to be delivered to the Florida Medicaid program beneficiaries and reimbursed
  through a capitated payment arrangement. 
  The Florida Healthy Kids Corporation Program  9. The FHKC program contracted with licensed
  managed care organizations and health insurance entities to extend
  affordable, accessible, quality health care to the qualifying population of
  uninsured children in families with incomes too high to qualify for the
  Florida Medicaid program, but too low to afford private health
  insurance.  10. Title XXI of the Social
  Security Act and Title 42 of the Code of Federal Regulations authorized the
  creation of the FHKC program, and Florida created FHKC as a not-for-profit
  corporation pursuant to Section 624.91, Florida Statutes. FHKC was funded
  through a combination of state and federal funds under the State Children's
  Health Insurance Program as described in Title XXI of the Social Security
  Act.  WELLCARE's "80/20"
  Contracts with AHCA  11. WELLCARE, a
  Delaware entity, acted through its subsidiaries to provide managed health
  care services primarily for government-sponsored health care programs such as
  Medicaid and Medicare. Among other business activities, WELLCARE provided
  Medicaid services in a number of states, including Florida. The Medicaid
  program for each state paid WELLCARE for the managed care services provided
  to Medicaid beneficiaries residing in that state.  12. WELLCARE was one of the largest
  providers of managed care services in Florida, and it enrolled Medicaid
  patients into one of its two plans: Wellcare of Florida,

  






 















	
  

  	
  Inc. (formerly known as Well Care HMO, Inc., and doing
  business as StayWell Health Plan of Florida, referred to herein as
  "STAYWELL") and Healthease of Florida, Inc.
  ("HEALTHEASE"). Both STAYWELL and HEALTHEASE were wholly-owned
  subsidiaries of WELLCARE and legal entities created under Florida law. As
  noted above, AHCA was the agency charged with administering the Florida
  Medicaid program.  13. To govern
  aspects of the provision of additional Florida Medicaid program services,
  that is, certain behavioral health care services, to Florida Medicaid
  beneficiaries, Florida Statute 409.912(4)(b) was enacted, effective June 7,
  2002, which read, in pertinent part: 
  To ensure unimpaired access to behavioral health care services by
  Medicaid recipients, all contracts issued pursuant to this paragraph shall
  require 80 percent of the capitation paid to the managed care plan, including
  health maintenance organizations, to be expended for the provision of
  behavioral health care services. In the event the managed care plan expends
  less than 80 percent of the capitation paid pursuant to this paragraph for
  the provision of behavioral health care services, the difference shall be
  returned to the agency.  14. Thus,
  beginning in or about mid-2002, AHCA began covering the behavioral health
  care services, via contracts which included provisions for the new services
  to be delivered to Florida Medicaid beneficiaries through a capitated
  arrangement. WELLCARE, through its STAYWELL and HEALTHEASE plans, contracted
  with AHCA to provide a variety of services to Florida Medicaid beneficiaries,
  including community behavioral health services (also sometimes referred to as
  "mental health services"). The contracts between AHCA and STAYWELL
  and HEALTH EASE

  






 















	
  

  	
  provided that STAYWELL and HEALTH EASE were paid on a
  flat or "capitated" rate for each beneficiary or member enrolled in
  one of the two health plans. The capitated rate varied depending on age, sex,
  geographic location, and other factors. Per the relevant AHCA contracts'
  provisions relating to community behavioral health services and in  accordance with Florida law, STAYWELL and
  HEALTHEASE were allowed to retain 20% of the related premiums received from
  AHCA to cover their administrative expenses and overhead. As to the remaining
  80% of the premiums received from AHCA, both the contracts and Florida law
  required that any funds not expended by STAYWELL or HEALTHEASE or paid
  directly or indirectly to community behavioral health services providers
  solely for the provision of those services had to be returned to the state
  (these AHCA contracts which included such 80/20 provisions are referred to
  herein as "80/20 contracts"). 
  15. The AHCA 80/20 contracts included language identical, or
  substantially similar, to the following: 
  Community Behavioral Health Services Annual 80/20 Expenditure Report.  1. By April 1 of each year, Health Plans
  shall provide a breakdown of expenditures related to the provision of
  community behavioral health services, using the spreadsheet template provided
  by the Agency (see Section XII, Reporting Requirements). In accordance with
  Section 409.912, F.S., eighty percent (80%) of the Capitation Rate paid to
  the Health Plan by the Agency shall be expended for the provision of
  community behavioral health services. In the event the Health Plan expends
  less than eighty percent (80%) of the Capitation Rate, the Health Plan shall
  return the difference to the Agency no later than May 1 of each year.

  






 















	
  

  	
  a. For reporting purposes in accordance with this
  Section, 'community behavioral health services' are defined as those services
  that the Health Plan is required to provide as listed in the Community Mental
  Health Services Coverage and Limitations Handbook and the Mental Health
  Targeted Case Management Coverage and Limitations handbook.  b. For reporting purposes in accordance
  with the Section 'expended' means the total amount, in dollars, paid directly
  or indirectly to community behavioral health services providers solely for
  the provision of community behavioral health services, not including  administrative expenses or overhead of the
  plan. If the report indicates that a portion of the capitation payment is to
  be returned to the Agency, the Health Plan shall submit a check for that
  amount with the Behavioral Health Services Annual 80/20 Expenditure Report
  that the Health Plan provides to the Agency."  16. To facilitate the required reporting of
  expenditures relating to the provision of the community behavioral health care
  services, AHCA provided each participating health plan in Florida, including
  STAYWELL and HEALTHEASE, with a worksheet titled "Financial Worksheet
  For Behavioral Healthcare," or other similar title (such worksheet is
  referred to herein as "AHCA Behavioral Healthcare Worksheet"), that
  was organized in a manner to calculate and present to AHCA the amount of
  refund, if any, due AHCA under the relevant 80/20 contracts.  17. The AHCA Behavioral Healthcare
  Worksheet required, in part, each participating health plan, including
  STAYWELL and HEALTHEASE, to provide AHCA

  






 















	
  

  	
  with the plan's true and correct expenditure information
  relating to the plan's provision of behavioral health care services.
  "Behavioral health care services" was defined as those services
  that the plan was required to provide per the Community Mental Health
  Services Coverage and Limitations Handbook and the Mental Health Targeted
  Case Management Coverage and Limitations handbook.  WELLCARE's FHKC Program Contracts  18. Florida Statute 624.91(10) authorized
  the FHKC to:  [c]ontract with
  authorized insurers or any provider of health care services, meeting
  standards established by the [FHKC], for the provision of comprehensive
  insurance coverage to participants. Such standards shall include criteria
  under which the [FHKC] may contract with more than one provider of health
  care services in program sites. Health plans shall be selected through a
  competitive bid process. The [FHKC] shall purchase goods and services in the
  most cost-effective manner consistent with the delivery of quality medical
  care. The maximum administrative cost for a [FHKC] contract shall be 15
  percent. For health care contracts, the minimum medical loss ratio for a
  [FHKC] contract shall be 85 percent. 
  19. Since in or about October 2003, WELLCARE, through its STAYWELL and
  HEALTHEASE plans, contracted with the FHKC to provide insurance coverage to
  FHKC participants.  20.  In accordance with Florida Statute
  624.91(10), the relevant contracts between the FHKC and the WELLCARE entities
  STAYWELL and HEALTHEASE included a provision that established a medical loss
  ratio ("MLR") of 85% which required STAYWELL and HEALTHEASE to
  return to the FHKC one-half of the difference between the 85% MLR and the
  actual loss ratio experienced by STAYWELL and HEALTHEASE in providing the
  covered services. For example, the contract between

  






 















	
  

  	
  the FHKC and the WELLCARE entities STAYWELL and HEALTH
  EASE for the period beginning in October, 2005, read, in pertinent part:  In the event that the medical loss ratio
  for this Agreement is better than eighty-five percent (85%) in the aggregate
  for both [STAYWELL] and HEALTHEASE calculated in the same manner as the
  premium development and allocation methodology utilized in the [WELLCARE's]
  original rate proposal in its response to the RFP, [WELLCARE] shall share
  equally with [FHKC] the dollar differnce between the actual loss ratio for
  said period and the predicted eighty-five percent (85%).  [WELLCARE] shall provide annually [FHKC]
  with a written copy of its findings each year during the term of this
  Agreement by February 1st. If any payments are due under this provision,
  [WELLCARE] shall forward such payment with its written notification.
  [WELLCARE] may be subject to audit or verification [FHKC] or its designated
  agents.  The Conspiracy  21. WELLCARE, through its former officers
  and employees, conspired to defraud the Florida Medicaid program and the FHKC
  program. It was part of the conspiracy that: 
  (a) to fraudulently reduce WELLCARE's contractual payback obligations
  to AHCA under the 80/20 contracts and to the FHKC program, under its relevant
  contracts, and thereby correspondingly benefit WELLCARE through an increase
  in profits, WELLCARE, acting through its former officers and employees, would
  and did falsely and fraudulently inflate medical expenditure information
  reported to AHCA and to the FHKC program concerning WELLCARE's STAYWELL and
  HEALTH EASE plans through various acts and strategies including, but not
  limited to:

  






 















	
  

  	
  i. falsely and fraudulently including expenses in the
  relevant AHCA Behavioral Healthcare Worksheets for WELLCARE plans STAYWELL
  and HEALTHEASE that were not expenses incurred by the plans in providing the
  required community behavioral health services as defined and listed in the
  Community Mental Health Services Coverage and Limitations Handbook and the
  Mental Health Targeted Case Management Coverage and Limitations
  handbook;  ii. falsely and fraudulently
  including expenses in calculating the actual loss ratio reported by STAYWELL
  and HEALTHEASE to the FHKC program; 
  iii. using a wholly-owned entity named Harmony Behavioral Health, Inc.
  (formerly known as Wellcare Behavioral Health, Inc.), to conceal and falsely
  and fraudulently inflate the STAYWELL and HEALTH EASE plans' true and actual
  expenses incurred in providing the required certain medical services to
  Florida Medicaid and FHKC program recipients; and  iv. submitting false and fraudulent AHCA
  Behavioral Healthcare Worksheets to AHCA. 
  (b) to conceal WELLCARE's false and fraudulent reporting of
  expenditure information to AHCA, WELLCARE, through its former officers and
  employees, acting within the scope of their duties and authorities, would and
  did falsely and fraudulently provide certified Medicaid behavioral health
  encounter data to AHCA. Generally, "behavioral health encounter
  data" referred to the actual cost or expense of providing a particular
  behavioral health service; or in other words, "behavioral health
  encounter data" is the relevant data that details what specific services
  were performed and how much each service cost.

  






 















	
  

  	
  (c) WELLCARE's former
  officers and employees, acting within the scope of their duties and
  authorities, would and did engage in meetings and other conduct in a
  concerted and organized effort to conceal and cover-up the false and
  fraudulent nature of WELLCARE's various expenditure information and encounter
  data submissions to AHCA.  A. BRIAN
  ALBRITTON United States Attorney 
  By:   [SIGNATURE] Jay G.
  Trezevant  Assistant United States
  Attorney  [SIGNATURE] Anthony E.
  Porcelli  Assistant United States
  Attorney  [SIGNATURE] Robert T.
  Monk  Deputy Chief, Economic Crimes
  Section Assistant United States Attorney

  






 












 




	
  

  	
  Information AO 455 (Rev. 5/85)
  Waiver of Indictment UNITED STATES DISTRICT COURT FOR THE

  MIDDLE DISTRICT OF FLORIDA

  TAMPA DIVISION UNITED STATES OF AMERICA WAIVER OF INDICTMENT v. Criminal No. 8:09-cr-
  WELLCARE HEALTH PLANS, INC. I, Thomas F. O’Neil III, duly elected Secretary
  and authorized representative of WeIlCare Health Plans Inc. (“WELLCARE”), on
  behalf of the above named defendant, who is accused of participating in a
  health care fraud conspiracy, in violation of 18 U.S.C. § 1349, being advised
  of the nature of the charge, the proposed Information, and of WELLCARE’s
  rights, hereby waive prosecution of WELLCARE by Indictment and consent that
  the proceeding may be by Information rather than by Indictment. Pursuant to
  Fed. R. Crim. P. 7(b), I will confirm this waiver in open court at
  arraignment or other hearing. /s/ Thomas F. O’Neil WELLCARE HEALTH-PLANS,
  INC. (by and through its duly authorized representative) Defendant
  [SIGNATURE] For GREGORY W. KEHOE, ESQ. Greenberg Traurig, P.A. Counsel for
  WeIlCare Health Plans, Inc. Before Judicial Officer 

  






 















	
  

  	
  [FILED STAMP]
  UNITED STATES DISTRICT COURT MIDDLE DISTRICT OF FLORIDA TAMPA DIVISION CASE
  NO. 8:09-cr-00203-T.27EAS 18 U.S.C. § 1349 18 U.S.C. § 1347 18 U.S.C. §
  982(a)(7)  UNITED STATES OF AMERICA v.
  WELLCARE HEALTH PLANS, INC. 
  INFORMATION The United States Attorney charges: COUNT ONE

  (Conspiracy -
  18 U.S.C. § 1349) A. The Conspiracy 1. Beginning in or about mid-2002, and
  continuing through at least October 2007, within the Middle District of
  Florida, and elsewhere, WELLCARE HEALTH PLANS, INC. (formerly doing business
  as Wellcare Holdings, LLC, and also known as WCG Health Management, Inc.,
  referred to herein as "WELLCARE"), defendant herein, acting through
  its former officers and employees, knowingly and willfully did combine,
  conspire, confederate and agree with others to execute and attempt to execute
  a scheme and artifice to defraud a health care benefit program, that is, the
  Florida Medicaid program and the Florida Healthy Kids Corporation
  ("FHKC") program, and to obtain, by means of materialiy false
  pretenses, representations, and promises, money and property owned by, and
  under the control of, a health care benefit program, that is, the Florida
  Medicaid program (for an amount of approximately $33,649,553) and the 

  






 















	
  

  	
   FHKC program (for an amount of approximately
  $6,395,500), in connection with the delivery of and payment for health care
  benefits, items, and services, in violation of Title 18, United States Code,
  Section 1347. B. Relevant Background The Florida Medicaid Program 2. The
  Medicaid program, as established by Title XIX of the Social Security Act and
  Title 42 of the Code of Federal Regulations, authorized Federal grants to
  States for medical assistance to low-income persons who are blind, disabled,
  or members of families with dependent children or qualified pregnant women or
  children (herein referred to as “Medicaid beneficiaries” or “Medicaid
  recipients”). The Centers for Medicare and Medicaid Services (“CMS”),
  previously known as the Health Care Finance Administration (“HCFA”), was an
  agency of the United States Department of Health and Human Services (“HHS”),
  and was the federal governmental body responsible for the administration of
  the Medicaid program. CMS, in turn, authorized each state to establish a
  state agency to oversee the Medicaid program. 3. The Florida Medicaid program
  was authorized by Chapter 409, Florida Statutes, and Chapter 59G, Florida
  Administrative Code. Florida further established the Agency for Health Care
  Administration (“AHCA”) as the single state agency authorized to administer
  the Florida Medicaid program. 4. It was necessary for the states electing to
  participate in the Medicaid program to comply with the requirements imposed
  by the Social Security Act and regulations of the Secretary of HHS. 

  






 















	
  

  	
   5. The federal government reimbursed the
  states for a portion of the states’ Medicaid expenditures based on a formula
  tied to the per capita income in each state. The federal share of Medicaid
  expenditures (otherwise referred to as “federal financial participation” or
  “FFP”) varied from a minimum of 50% to as much as 83% of a state’s total
  Medicaid expenditures. In Florida, the FFP equaled approximately 59% of the
  state’s total Medicaid expenditures. 6. Certain health care practitioners,
  healthcare facilities, or health care plans that met the conditions of
  participation and eligibility requirements and that were enrolled in Medicaid
  could provide, and be reimbursed for rendering, Medicaid-covered services to
  Medicaid beneficiaries. 7. There were several ways in which reimbursement was
  made to health care providers, of which capitation reimbursement was one.
  Capitation reimbursement applied to health maintenance organizations (“HMOs”)
  and certain other providers. Said HMOs and providers were paid a fixed amount
  each month for each beneficiary or member (per capita) enrolled to receive
  services from that HMO or provider. The Florida Healthy Kids Corporation
  Program 8. The FHKC was a program authorized by Title XXI of the Social
  Security Act and Title 42 of the Code of Federal Regulations, and was created
  as a not-for-profit corporation pursuant to Section 624.91, Florida
  Statutes. 9. The FHKC contracted with licensed managed care organizations and
  health insurance entities to extend affordable, accessible, quality health
  care to the qualifying population of uninsured children in families with
  incomes too high to qualify 

  






 















	
  

  	
   for the Florida Medicaid program, but too
  low to afford private health insurance coverage. 10. The FHKC was funded
  through a combination of state and federal funds under the State Children’s
  Health Insurance Program as described in Title XXI of the Social Security
  Act. WELLCARE’s “80/20” Contracts with AHCA 11. Generally, through its
  subsidiaries, WELLCARE, a legal entity created under Delaware law, operated
  as a provider of managed health care services, targeted to
  government-sponsored health care programs, focusing on Medicaid and Medicare.
  12. Among other business activities, WELLCARE provided Medicaid services in a
  number of states, including Florida. WELLCARE was paid independently by each
  state’s Medicaid program to provide managed care services to Medicaid
  beneficiaries residing in that state. 13. WELLCARE was one of the largest
  providers of managed care services in Florida, where it enrolled Medicaid
  patients into one of its two plans, Wellcare of Florida, Inc. (formerly
  known as Well Care HMO, Inc., and doing business as StayWell Health Plan
  of Florida, referred to herein as “STAYWELL”) and Healthease of
  Florida, Inc. (“HEALTHEASE”). Both STAYWELL and HEALTHEASE were
  wholly-owned subsidiaries of WELLCARE and legal entities created under
  Florida law. 14. To govern aspects of the provision of additional Florida
  Medicaid program services, that is, certain behavioral health care services,
  to Florida Medicaid beneficiaries, Florida Statute 409.912(4)(b) was
  enacted, effective June 7, 2002, which read, in pertinent part: 

  






 















	
  

  	
   To ensure unimpaired access to behavioral
  health care services by Medicaid recipients, all contracts issued pursuant to
  this paragraph shall require 80 percent of the capitation paid to the managed
  care plan, including health maintenance organizations, to be expended for the
  provision of behavioral health care services. In the event the managed care
  plan expends less than 80 percent of the capitation paid pursuant to this
  paragraph for the provision of behavioral health care services, the
  difference shall be returned to the agency. 15. Thus, beginning in or about
  mid-2002, AHCA began covering the additional program services, that is, said
  certain behavioral health care services, via contracts which included
  provisions for the new services to be delivered to Florida Medicaid beneficiaries
  through a capitated arrangement. 16. Thereafter, since in or about mid-2002,
  through its STAYWELL and HEALTHEASE plans, WELLCARE contracted with AHCA to
  provide a variety of services to Florida Medicaid beneficiaries, including
  community behavioral health services (also sometimes referred to as “mental
  health services”). 17. Per the relevant contracts between AHCA and STAYWELL
  and HEALTHEASE, the WELLCARE entities STAYWELL and HEALTHEASE were paid on a
  flat or “capitated” rate for each beneficiary or member enrolled in one of
  the two health plans. The capitated rate varied depending on age, sex,
  geographic location, and other factors. 18. Also per the relevant AHCA
  contracts, as said contracts related to providing said community behavioral
  health services in accordance with Florida law, STAYWELL and HEALTHEASE were
  allowed to retain 20% of the related premiums received from AHCA to cover the
  entities’ administrative expenses and overhead. As to 

  






 















	
  

  	
   the remaining 80%, said AHCA contracts and
  Florida law required that any funds not expended or paid directly or
  indirectly to community behavioral health services providers solely for the
  provision of the services had to be returned to the state (AHCA contracts
  including such 80/20 provisions are referred to herein as “80/20 contracts”).
  19. The AHCA 80/20 contracts therefore included language identical, or
  substantially similar, to the following: Community Behavioral Health Services
  Annual 80/20 Expenditure Report. 1. By April 1 of each year, Health
  Plans shall provide a breakdown of expenditures related to the provision of
  community behavioral health services, using the spreadsheet template provided
  by the Agency (see Section XII, Reporting Requirements). In accordance
  with Section 409.912, F.S., eighty percent (80%) of the Capitation Rate
  paid to the Health Plan by the Agency shall be expended for the provision of
  community behavioral health services. In the event the Health Plan expends
  less than eighty percent (80%) of the Capitation Rate, the Health Plan shall
  return the difference to the Agency no later than May 1 of each year. a.
  For reporting purposes in accordance with this Section, ‘community behavioral
  health services’ are defined as those services that the Health Plan is
  required to provide as listed in the Community Mental Health Services
  Coverage and Limitations Handbook and the Mental Health Targeted Case
  Management Coverage and Limitations handbook. b. For reporting purposes in
  accordance with the Section ‘expended’ means the total amount, in
  dollars, paid directly or indirectly to community behavioral health services
  providers solely for the provision of community behavioral health services,
  not including 

  






 















	
  

  	
   administrative expenses or overhead of the
  plan. If the report indicates that a portion of the capitation payment is to
  be returned to the Agency, the Health Plan shall submit a check for that
  amount with the Behavioral Health Services Annual 80/20 Expenditure Report
  that the Health Plan provides to the Agency.” 20. To facilitate the required
  reporting of expenditures relating to the provision of said community
  behavioral health care services, AHCA provided each participating health plan
  in Florida, including STAYWELL and HEALTHEASE, with a worksheet titled
  Financial Worksheet For Behavioral Healthcare, or other similar title (such
  worksheet is referred to herein as “AHCA Behavioral Healthcare Worksheet”), that
  was organized in a manner to calculate and present to AHCA the amount of
  refund, if any, due AHCA under the relevant 80/20 contracts. 21. Said AHCA
  Behavioral Healthcare Worksheet required, in part, each participating health
  plan, including STAYWELL and HEALTH EASE, to provide AHCA with the plan’s
  true and correct expenditure information relating to the plan’s provision of
  behavioral health care services, defined as those services that the plan was
  required to provide per the Community Mental Health Services Coverage and
  Limitations Handbook and the Mental Health Targeted Case Management Coverage
  and Limitations handbook. 

  






 















	
  

  	
   WELLCARE’s FHKC Program Contracts 22. To
  govern certain aspects of the FHKC, Florida Statute 624.91(10) was
  enacted which, in pertinent part, authorized the FHKC to: [c]ontract with
  authorized insurers or any provider of health care services, meeting
  standards established by the [FHKC], for the provision of comprehensive
  insurance coverage to participants. Such standards shall include criteria
  under which the [FHKC] may contract with more than one provider of health
  care services in program sites. Health plans shall be selected through a
  competitive bid process. The [FHKC] shall purchase goods and services in the
  most cost-effective manner consistent with the delivery of quality medical
  care. The maximum administrative cost for a [FHKC] contract shall be 15
  percent. For health care contracts, the minimum medical loss ratio for a
  [FHKC] contract shall be 85 percent. 23. Since in or about October, 2003,
  through its STAYWELL and HEALTHEASE plans, WELLCARE contracted with the FHKC
  to provide insurance coverage to FHKC participants. 24. In accordance with
  Florida Statute 624.91(10), the relevant contracts between the FHKC and the
  WELLCARE entities STAYWELL and HEALTHEASE included a provision that
  established a medical loss ratio (“MLR”) of 85% which required STAYWELL and
  HEALTHEASE to return to the FHKC one-half of the difference between the 85%
  MLR and the actual loss ratio experienced by STAYWELL and HEALTH EASE in
  providing the covered services. For example, the contract between the FHKC
  and the WELLCARE entities STAYWELL and HEALTHEASE for the period beginning in
  October, 2005, read, in pertinent part: In the event that the medical loss
  ratio for this Agreement is better than eighty-five percent (85%) in the
  aggregate for both [STAYWELL] and HEALTHEASE calculated in the same manner as
  the premium development and allocation 

  






 















	
  

  	
   methodology utilized in the [WELLCARE’s]
  original rate proposal in its response to the RFP, [WELLCARE] shall share
  equally with [FHKC] the dollar differnce between the actual loss ratio for
  said period and the predicted eighty-five percent (85%). [WELLCARE] shall
  provide annually [FHKC] with a written copy of its findings each year during
  the term of this Agreement by February 1st. If any payments are due
  under this provision, [WELLCARE] shall forward such payment with its written
  notification. [WELLCARE] may be subject to audit or verification [FHKC] or
  its designated agents. C. The Manner and Means of the Conspiracy 25. The
  manner and means by which the conspirators sought to accomplish the objects
  of the conspiracy included, among others, the following: (a) It was part of
  the conspiracy that, to fraudulently reduce WELLCARE’s contractual payback
  obligations to AHCA under the 80/20 contracts and to the FHKC, under its
  relevant contracts, and thereby correspondingly benefit WELLCARE through an
  increase in profits, WELLCARE, acting through its former officers and
  employees, would and did falsely and fraudulently inflate medical expenditure
  information reported to AHCA and to the FHKC by WELLCARE concerning its
  STAYWELL and HEALTHEASE plans through various acts and strategies including,
  but not limited to: i. falsely and fraudulently including expenses in the
  relevant AHCA Behavioral Healthcare Worksheets for WELLCARE plans STAYWELL
  and HEALTHEASE that were not expenses incurred by the plans in providing the
  required community behavioral health services as defined and listed in the
  Community Mental Health Services Coverage and Limitations Handbook and the
  Mental Health Targeted Case Management Coverage and Limitations handbook; 

  






 















	
  

  	
   ii. falsely and fraudulently including
  expenses in calculating the actual loss ratio reported by WELLCARE plans
  STAYWELL and HEALTHEASE to the FHKC; iii. using a wholly-owned entity named
  Harmony Behavioral Health, Inc. (formerly known as Wellcare Behavioral
  Health, Inc.), to conceal and falsely and fraudulently inflate the
  STAYWELL and HEALTHEASE plans’ true and actual expenses incurred in providing
  the required certain medical services to Florida Medicaid and FHKC program
  recipients; and iv. submitting false and fraudulent AHCA Behavioral
  Healthcare Worksheets to AHCA. (b) It was further a part of the conspiracy
  that, to conceal WELLCARE’s false and fraudulent reporting of expenditure
  information to AHCA, WELLCARE, through its former officers and employees,
  acting within the scope of their duties and authorities, would and did
  falsely and fraudulently provide certified Medicaid behavioral health encounter
  data to AHCA. (c) It was further a part of the conspiracy that WELLCARE’s
  former officers and employees, acting within the scope of their duties and
  authorities, would and did engage in meetings and other conduct in a
  concerted and organized effort to conceal and cover-up the false and
  fraudulent nature of WELLCARE’s various expenditure information and encounter
  data submissions to AHCA. All in violation of Title 18, United States Code,
  Section 1349. 

  






 















	
  

  	
   FORFEITURES 1. The allegations contained in
  Count One of this Information are hereby realleged and incorporated by
  reference for the purpose of alleging forfeitures pursuant to the provision
  of Title 18, United States Code, Section 982(a)(7). 2. From WELLCARE’s
  engagement in the conspiracy charged in Count One to violate Title 18, United
  States Code, Section 1347, relating to a health care benefit program,
  all in violation of Title 18, United States Code, Section 1349, defendant,
  WELLCARE, shall forfeit to the United States of America, pursuant to Title
  18, United States Code, Section 982(a)(7), any and all right, title, and
  interest he may have in any property, real or personal, that constitutes or
  is derived, directly or indirectly, from gross proceeds traceable to the
  commission of the offense, including but not limited to, a sum of money equal
  to the amount of proceeds obtained as a result of such offense. 3. If any of
  the property described above, as a result of any act or omission of the
  defendant: a. cannot be located upon the exercise of due diligence; b. has
  been transferred or sold to, or deposited with, a third party; c. has been
  placed beyond the jurisdiction of the court; d. has been substantially
  diminished in value; or e. has been commingled with other property which
  cannot be divided without difficulty, 

  






 















	
  

  	
   the United States of America shall be
  entitled to forfeiture of substitute property under the provisions of Title
  21, United States Code, Section 853(p), as incorporated by Title 18,
  United States Code, Section 982(b)(1). A. BRIAN ALBRITTON United States
  Attorney By: [SIGNATURE] Jay G. Trezevant Assistant United States Attorney [SIGNATURE]
  Anthony E. Porcelli Assistant United States Attorney [SIGNATURE] Robert T.
  Monk Deputy Chief, Economic Crimes Section Assistant United States
  Attorney 

  






 















	
  

  	
   BY: [ ] COMPLAINT ® INFORMATION [ ]
  INDICTMENT OFFENSE CHARGED health care fraud conspiracy [ ] Petty [ ] Minor [
  ] Misdemeanor [ ] Felony Place of Offense U.S.C. Citation Hillsborough 18
  U.S.C. 1349 PROCEEDING Name of Complainant Agency, or Person (& Title, if
  any) o person is awaiting trial in another Federal or State Court,
  give name of court: o this person/proceeding is transferred from another district per
  FRCrP 20, [ ] 21 or [ ] 40. Show District: o this is a reprosecution of charges previously dismissed which
  were dismissed on motion of: U.S. Att’y [ ] Defense o this prosecution relates to a pending case involving this same
  defendant o prior proceedings or appearance(s) MAGISTRATE CASE NO. before
  U.S. Magistrate regarding this defendant were recorded under DOCKET NO. Name
  of District Court, and/or Judge/Magistrate Location (City) MIDDLE DISTRICT OF
  FLORIDA TAMPA, FLORIDA Defendant - U.S. vs. GREGORY WEST Address Birth Date
  (Optional unless a juvenile) o Male [ ] Female 0 Alien SSN: FBI No. DEFENDANT 

  IS NOT IN CUSTODY Has not been arrested, pending outcome this proceeding If
  not detained give date any prior summons } was served on above charges Is a
  Fugitive Is on Bail or Release from (show District) IS IN CUSTODY On this
  charge On another conviction Awaiting trial on other charges } [ ] Fed’l [ ]
  State If answer to (6) is “Yes”, show name of institution: Has detainer
  0 Yes } If “Yes” been filed? [ ] No } give date filed: Name and Office of
  Person Furnishing information on This Form ROBERT E. O’NEILL U.S. Att’y Other
  U.S. Agency Name of Asst. U.S. Att’y JAY G. TREZEVANT Mo. Day Year DATE OF
  ARREST Or... if arresting Agency & Warrant were not Federal

  Mo. Day Year DATE TRANSFERRED TO U.S. CUSTODY o This report amends AO 257 previously submitted ADDITIONAL
  INFORMATION OR COMMENTS METHOD OF SERVICE: RECOMMENDED BOND: COURTROOM
  REQUIREMENTS: Will there be a defendant or witness in custody? _Yes No
  Statutes: Counts: Penalty Provisions: Maximum Penalty: 18 U.S.C. 1349 Dale R.
  Sisco [ ](AP) Appointed 0(FD) Federal Public Defender [ ](PS) Pro Se 0(RE)
  Retained 0(TB) To be Appointed Start Date: 

  






 















	
  

  	
   MIDDLE DISTRICT OF FLORIDA LIONS - CRIMINAL
  INDICTMENT/INFORMATION FORM (Complete separate forms for each defendant) USAO
  ID NO.: CASE NO.: ENTERED IN LIONS: NAME OF AUSA AND LEGAL ASSISTANT: UNITED
  STATES v. DEFENDANT INFORMATION: Tribe: [ ] Seminole [ ] Miccosukee
  Citizenship Status: [ ] (C) U.S. Citizen [ ] (E) Expired Visa/Visa
  Overstay [ ] (I) Illegal Alien/Undocumented [ ] (V) Valid, Current
  Visa of Any Kind o (Y) Alien Lawfully in the U.S. [ ] (U) Unknown
  Country of Citizenship: Estimated Loss: Actual/Intended/Attempted: $ Defendant’s Status: [ ] (JT) Juvenile to be Prosecuted as an Adult [ ] (JS)
  Juvenile Study [ ] (FU) Fugitive Has defendant committed an offense which
  involves or implicates or was discovered as a result of the National Instant
  Check System (Brady)? [ ] Yes [ ] No DEFENDANT’S INFORMATION FOR HEALTH CARE
  FRAUD CASES ONLY: National Provider Identifier (used by HCFA): Occupation
  Code: Description if Code is 999: Employer Name: Employer Type Code: Description
  if Code is 999: Employer Address: CASE INFORMATION: Mandatory: If “036” -
  must enter job title in Defendant Information LEAD CHARGE: USC Is this a
  HIDTA Case? [ ] Yes [ ] No PROGRAM CATEGORY: Primary Secondary Is this an
  OCDETF Case? [ ] Yes [ ] No FCFLM No.: (Submit OCDETF Forms to Lead Task
  Force Attorney) (Note: If this case is designated “OCDETF,” LIONS should
  reflect a program category “047”. (If it does not, inform Docketing so it can
  be changed. Make sure to indicate FCFLM No. assigned to this case).
  CONTROLLED SUBSTANCES: (Enter Actual Quantity Seized and Measure in the Space
  Provided Next To The Type of Substance) List More Than One, If Applicable) If
  none, enter “0” to indicate type of drug involved. MEASURE: : (B) Bales
  (D) Dose Unit (G) Grams (K) Kilos (L) No. of
  Marijuana Ounces (P) Pounds (T) Tons uana Plants (0) TYPE: TYPE:
  TYPE: TYPE: (A) Amphetamines (G) Prescription Drugs
  (M) Marijuana (S) Steroids (B) Barbiturates (H) Heroin
  (N) Methaqualone (T) Methamphetamine (C) Cocaine (I ) Meth Lab
  (O) Other (U) Hallucinogens (D) Opium (J) Ketamine
  (P) PCP (Other Than PCP and LSD) (E) Hashish (K) Crack Cocaine
  (Q) Quaaludes (X) Oxycontin (F) Fentanyl (L) LSD
  (R) Precursor (Y) Ecstasy/MDMA Grand Jury No. Case Weight: [ ] CW 1
  - 1 to 9 days Is there a person who suffered direct physical, emotional or o CW 2 - 10 to 19 days pecuniary harm as a result of the offense?
  [ ] Yes [ ] No o CW 3 - 20 + days Victim Federal Program Agency: (Federal Agency
  Suffering the Loss) RELATED MATTER/CASE INFORMATION: (Reason Choices:
  (DE=Defendant) (Sl=Same Incident) (O T)=Other [describe]) Case No. USAO No.
  Reason: Asset Forfeiture Provisions? [ ] Yes [ ] No Project Safe
  Neighborhood/Tirggerlock Case: [ ] Yes [ ] No Firearm Charge: Does this
  require U.S. Attorney approval? [ ] Yes [ ] No If yes, submit prosecution
  package through chain of command for approval. NOTE: In multi-defendant
  cases, defendants who will not be charged should be closed at this time.
  Attach the appropriate paperwork. 

  






 















	
  

  	
   Memorandum [SEAL] Subject Date United States
  v. GREGORY WEST USAO No. To From Joyce Fisher JAY G. TREZEVANT Victim Witness
  Specialist Assistant United States Attorney There is o is not an identifiable person or persons who have suffered
  direct o physical o emotional, or o pecuniary harm as a result of the commission of the crime in
  this case. This form is being completed in regard to: o A Complaint ® An Indictment/Information o A Plea Agreement o A Sentencing o A Rule 35 Resentencing Agency: Agent: Telephone: