WellCare to pay $35.2 million amid Medicaid probe
NEW YORK (Reuters) - WellCare Health Plans Inc (WCG.N) said on Monday it agreed to pay $35.2 million to the U.S. Attorney related to a government probe into accounting errors in its Florida Medicaid behavioral health contracts.
The company, which provides health-care services under government programs, said in a filing with the SEC that the payment did not represent a settlement, and was an estimate of refunds its subsidiaries owe for the years 2002 through 2006.
WellCare said the payment does not include any "interest, fines, penalties or other assessments that may be imposed" against it. It said the investigation continues.
Oppenheimer analyst Carl McDonald said the low payment should boost WellCare shares on Tuesday.
"If the government is willing to agree to such a small amount, the likelihood of WellCare being put out of business because of this investigation seems remote," McDonald wrote in a research note.
In October, federal and state agents raided WellCare's Florida headquarters, sending its shares down sharply. The shares closed down 3.9 percent at $38.24 on Monday.
(Reporting by Jonathan Spicer; Editing by Gary Hill)
