ahcaagreement.htm


    Back to Form
      8-K

    Exhibit
      10.1

     

    

      AGREEMENT

       

      Whereas:

       

      
        	
                A.

              	
                WellCare
                  Health Plans, Inc., a Delaware corporation, owns or controls various
                  subsidiaries and other corporations including, but not limited
                  to,
                  WellCare of Florida, Inc. (d/b/a Staywell Health Plan of Florida)
                  and
                  HealthEase of Florida, Inc. (WellCare Health Plans, Inc., WellCare
                  of
                  Florida, Inc. and HealthEase of Florida, Inc. are hereinafter collectively
                  referred to as "WeIlCare" and WeIlCare of Florida, Inc. and HealthEase
                  of
                  Florida, Inc. are hereinafter collectively referred to as "the
                  WellCare
                  Florida HMOs").

              


      

       

      
        	
                B.

              	
                The
                  WellCare HMOs are licensed health maintenance organizations pursuant
                  to
                  Florida law, which participate in Medicare, Medicaid, and other
                  government
                  programs.

              


      

       

      
        	
                C.

              	
                The
                  Agency for Health Care Administration ("AHCA") is the Florida agency
                  responsible for administering the Florida Medicaid
                  program.

              


      

       

      
        	
                D.

              	
                The
                  Florida Attorney General's Medicaid Fraud Control Unit ("MFCU"),
                  has been
                  conducting an investigation of
                  WellCare.

              


      

       

      
        	
                E.

              	
                The
                  United States Attorney's Office for the Middle District of Florida
                  (hereinafter the "USAO") has been conducting an investigation of
                  WellCare.

              


      

       

      Therefore:

       

      
        	
                1.

              	
                The
                  parties to this Agreement are WellCare, on the one hand, and the
                  USAO,
                  AHCA, and MFCU on the other.

              


      

       

      
        	
                2.

              	
                The
                  WellCare Florida HMOs will transmit the sum of $35,200,000.00 (Thirty-Five
                  Million Two Hundred Thousand Dollars and No Cents) (the "Transmitted
                  Amount") to the Financial Litigation Unit of the USAO in accordance
                  with
                  the schedule set forth in Exhibit A.
                  WeIlCare represents and warrants that the Transmitted Amount constitutes
                  the best estimate, based on information developed during the ongoing
                  investigation by a Special Committee of the board of directors
                  of
                  WellCare, as of the Effective Date of this Agreement, of the maximum
                  potential amount of Medicaid behavioral health capitation aggregate
                  repayment owed to AHCA by the WellCare Florida HMOs pursuant to
                  Florida
                  Rev. Stat. § 409.912(4)(b) for the period December 1, 2002 through
                  December 31, 2006. WellCare understands that the Transmitted Amount
                  does
                  not include any interest, fines, penalties or other assessments
                  that may
                  be imposed against WellCare.

              


      

       

      
        	
                3.

              	
                Of
                  the total Transmitted Amount, WellCare acknowledges and agrees
                  that the
                  WellCare Florida HMOs shall make payment of not less than a total
                  amount
                  of $24,500,000.00 (Twenty-Four Million Five Hundred Thousand Dollars
                  and
                  No Cents), as set forth on Exhibit
                  A (the
                  "Funds"), which WellCare authorizes the USAO, AHCA and MFCU to
                  access and
                  distribute to the appropriate Federal and State agencies in accordance
                  with applicable Federal and State law. By granting the USAO, AHCA
                  and MFCU
                  the right to access and distribute the Funds, WellCare expressly
                  waives
                  any right it may have at any time to the
                  Funds.

              


      

       

      
        	
                4.

              	
                The
                  parties acknowledge and agree that $10,700,000.00 (Ten Million
                  Seven
                  Hundred Thousand Dollars and No Cents) (the "Escrow Amount") of
                  the
                  Transmitted Amount, as

              


      

       


      
        
          
            Initials:  TO’N_/s/TFO_   HB
              /s/HB   DR
              /s/DR
              CH /s/CTH

          

           
            

        

        
           
            

          
            

          

        

        
           
            

        

      


      
        	
                 
                  

              	
                set
                  forth on Exhibit
                  A, will be held in an interest-bearing escrow account pending
                  resolution of all Federal and related State claims by the United
                  States or
                  the State of Florida for monetary damages or other financial impositions
                  of any kind arising from, or related to, the investigation by the
                  MFCU or
                  the USAO, referenced in paragraphs D and E above. The USAO or,
                  at the
                  USAO's discretion, the Clerk of the United States District Court
                  for the
                  Middle District of Florida or other USAO designee shall serve as
                  the
                  escrow agent.

              


      

       

      
        	
                5.

              	
                Transmittal
                  of the Transmitted Amount will be made by Electronic Funds Transfer,
                  pursuant to instructions to be provided by the
                  USAO.

              


      

       

      
        	
                6.

              	
                Transmittal
                  of the Transmitted Amount will be made such that it is received
                  by the
                  Financial Litigation Unit of the USAO on or before seven (7) calendar
                  days
                  following execution of this Agreement by all parties. The WellCare
                  Florida
                  HMOs will bear all fees and costs associated with that transmittal
                  and
                  will bear any reasonable fees and costs associated with escrow
                  of the
                  Escrow Amount.

              


      

       

      
        	
                7.

              	
                WellCare
                  agrees that the receipt of the Transmitted Amount, the holding
                  of the
                  Escrow Amount in an escrow account, or the accessing and distribution
                  of
                  the Funds, as contemplated herein, shall neither operate, nor be
                  construed, as a settlement or release of any civil or administrative
                  claims for monetary, injunctive, or other relief, whether under
                  Federal,
                  State, or local statutes, regulations, or common law. Additionally,
                  the
                  receipt of the Transmitted Amount, the holding of the Escrow Amount
                  in an
                  escrow account, or the accessing and distribution of the Funds,
                  as
                  contemplated herein, shall neither operate, nor be construed, as
                  a release
                  from any Federal, State or local criminal liability and will not
                  have any
                  impact or effect upon any Federal, State or local investigation
                  of any
                  kind.

              


      

       

      
        	
                8.

              	
                Nothing
                  in this Agreement shall operate, or be construed, as any concession
                  by the
                  USAO, AHCA or MFCU that WellCare is a party that came forward voluntarily,
                  nor as a concession that WellCare is entitled to any limitation
                  of its
                  potential civil or criminal liability including, but not limited
                  to, that
                  which is available under 31 U.S.C. § 3729(a) or § 68.082(3), Fla.
                  Stats.

              


      

       

      
        	
                9.

              	
                Nothing
                  in this Agreement shall operate, or be construed, to restrain or
                  limit the
                  power of the State of Florida or the United States to regulate
                  WellCare
                  pursuant to the Police Power and other constitutional, statutory,
                  regulatory or common law
                  authorities.

              


      

       

      
        	
                10.

              	
                Compliance
                  with all applicable federal, state and local tax requirements shall
                  be the
                  sole responsibility of the WellCare Florida HMOs. This Agreement
                  is
                  executed by WellCare without reliance upon any representation by
                  the State
                  of Florida or the United States as to the tax consequences hereof,
                  and the
                  WellCare Florida HMOs are responsible for the payment of all taxes
                  that
                  may be associated with the transmittal referenced herein or any
                  other
                  terms of this Agreement.

              


      

       

      
        	
                11.

              	
                WellCare
                  and each and every person executing this Agreement on its behalf
                  acknowledge that WellCare has had an adequate opportunity to discuss
                  this
                  Agreement with counsel, who have explained this document, and WellCare
                  agrees that it understands all of the terms and conditions of this
                  Agreement. Further, WellCare and each and every person executing
                  this
                  Agreement on its behalf acknowledge that they have read this Agreement,
                  understand the contents thereof, and execute the same freely and
                  voluntarily.

              


      

       


      
        
          
            Initials:  TO’N_/s/TFO_   HB
              /s/HB   DR
              /s/DR
              CH /s/CTH

          

           
            

        

        
           
            

          
            

          

        

        
           
            

        

      


      
        	
                12.

              	
                Each
                  and every person executing this Agreement as representative of
                  WellCare or
                  any other entity warrants and represents that he or she possesses
                  full
                  authority to bind the entity or entities on whose behalf they are
                  executing. Further, each and every person executing this Agreement
                  on
                  behalf of WellCare warrants and represents that any and all necessary
                  Board, corporate, partner, shareholder, or other approvals have
                  been
                  obtained.

              


      

       

      
        	
                13.

              	
                This
                  Agreement is binding on WellCare’s successors, transferees, and
                  assigns.

              


      

       

      
        	
                14.

              	
                This
                  Agreement constitutes the complete agreement among WellCare, USAO,
                  AHCA
                  and MFCU on the subject matter covered herein. This Agreement can
                  only be
                  corrected, amended or supplemented in a writing executed by all
                  parties
                  who execute this Agreement.

              


      

       

      
        	
                15.

              	
                The
                  parties hereto agree that any rule of construction to the effect
                  that
                  ambiguities are to be resolved against the drafting party shall
                  not apply
                  in any interpretation or construction of this Agreement, or any
                  corrections, amendments or supplements
                  hereto.

              


      

       

      
        	
                16.

              	
                It
                  is contemplated that this Agreement may be executed in several
                  counterparts, with a separate signature page for each party executing.
                  All
                  such counterparts and signature pages, together, shall be deemed
                  to be one
                  document.

              


      

       

      



      
        
          
            Initials:  TO’N_/s/TFO_   HB
              /s/HB   DR
              /s/DR
              CH /s/CTH

          

           
            

        

        
           
            

          
            

          

        

        
           
            

        

      


      Executed
        this 18th
        day of August,
        2008.

       

      /s/
        Thomas F.
        O’Neil                                                                                 
                                                                          

      Thomas
        F.
        O'Neil III

      Senior
        Vice President, General Counsel and Secretary

      WellCare
        Health Plans, Inc.

      WellCare
        of Florida, Inc. (d/b/a Staywell Health Plan of Florida)

      Health
        Ease of Florida, Inc.

       

      Executed
        this 15th
        day of August,
        2008.

       

      /s/
        Holly
        Benson                                                                                   
                                                                          

      Holly
        Benson, Secretary

      Florida
        Agency for Health Care Administration

       

      Executed
        this 18th
        day of August,
        2008. 

       

      /s/
        Donna R.
 Rohwer                                                                                 
                                                                          

      Donna
        R.
        Rohwer, Asst. Attorney General Office

      of
        the
        Attorney General of Florida

       

      Executed
        this 18th
        day of August,
        2008.

       

      /s/
        Charles T.
        Harden                                                                                                                                                           

      Charles
        T. Harden III, Asst. U.S. Attorney

      U.S.
        Attorney's Office, Middle District of Florida

      



      
        
          
            Initials:  TO’N_/s/TFO_   HB
              /s/HB   DR
              /s/DR
              CH /s/CTH

          

           
            

        

        
           
            

          
            

          

        

        
           
            

        

      


      EXHIBIT
        A

       

      


      
        	
                Plan

              	
                Funds

              	
                Escrow
                  Amount

              	
                Transmitted

                Amount

              
	 
                	 
                	 
                	 
                
	
                WellCare
                  of Florida, Inc. (d/b/a Staywell Health Plan of Florida)

              	
                $11,310,369

              	
                $4,939,631

              	
                $16,250,000

              
	
                HealthEase
                  of Florida, Inc.

              	
                $13,189,631

              	
                $5,760,369

              	
                $18,950,000

              
	 
                	 
                	 
                	 
                
	
                Total

              	
                $24,500,000

              	
                $10,700,000

              	
                $35,200,000

              


      

       

      



      
        
          
            Initials:  TO’N_/s/TFO_   HB
              /s/HB   DR
              /s/DR
              CH /s/CTH