But in procurement, in order to get government contracting work, past performance is often held out as the key. But is it a key to something else, maybe, like the old boys network executive washroom?
When past performance includes failure, even epic failure, shouldn't that be taken as a guaranty of future failure? If so, why are so many failed government contractors still in that game?
WellCare Health Plans pays $137.5 million to settle fraud allegations April 3, 2012
U.S. Attorney for Connecticut announced Tuesday WellCare Health Plans Inc. will pay $137.5 million to the federal government and nine states to resolve four lawsuits alleging violations of the False Claims Act. WellCare, based in Tampa, Fla., provides managed health care services for approximately 2.6 million Medicare and Medicaid beneficiaries nationwide.In the article below, it is reported,
The lawsuits alleged a number of schemes to submit false claims to Medicare and various Medicaid programs, including allegations that WellCare falsely inflated the amount it claimed to be spending on medical care in order to avoid returning money to Medicaid and other programs in various states, including the Florida Medicaid and Florida Healthy Kids programs; knowingly retained overpayments it had received from Florida Medicaid for infant care; and falsified data that misrepresented the medical conditions of patients and the treatments they received.
Additionally, it was alleged that WellCare engaged in certain marketing abuses, including the “cherrypicking” of healthy patients in order to avoid future costs; manipulated “grades of service” or other performance metrics regarding its call center; and operated a sham special investigations unit.
The settlement requires that Wellcare pay the United States and nine states – Connecticut, Florida, Georgia, Hawaii, Illinois, Indiana, Missouri, New York and Ohio – a total of $137.5 million. WellCare may also be required to pay an additional $35 million in the event that the company is sold or experiences a change in control within three years of this agreement.
“Government health plans increasingly rely on managed care organizations to provide patient care. This case illustrates our commitment to ensure that government funds are in fact used to render care and not to line the pockets of those more concerned with the bottom line,” said Stuart F. Delery, Acting Assistant Attorney General for the Justice Department’s Civil Division.
This is the second monetary settlement reached with WellCare since the government initiated a criminal and civil investigation of WellCare in 2006. On May 5, 2009, in order to resolve potential criminal charges related to losses by the Florida Medicaid and Healthy Kids programs, WellCare entered a Deferred Prosecution Agreement (DPA) with the U.S. Attorney in the Middle District of Florida, under which WellCare paid $40 million in restitution and forfeited an additional $40 million. The U.S. Attorney’s office also has pursued criminal charges against several former Wellcare employees. One former WellCare analyst, Gregory West, entered into a plea agreement and pleaded guilty to a conspiracy charge shortly after execution of a search warrant on WellCare’s corporate headquarters in Tampa; he is currently awaiting sentencing. Five former executives – including former CEO Todd Farha, former CFO Paul Behrens and former general counsel Thaddeus Bereday – were indicted in March 2011 and are currently awaiting trial, which is presently scheduled for January 2013. Additionally, Wellcare previously executed a Corporate Integrity Agreement (CIA) with the Office of Inspector General of the U.S. Department of Health and Human Services (HHS-OIG) that imposes compliance obligations on the company for a period of five years.
The resolution of the civil suits announced today brings the total recoveries from WellCare to $217.5 million, a number that will rise to over a quarter billion ($252.5 million) if the contingency payment provision is triggered.
"Five former executives — including CEO Todd Farha, CFO Paul Behrens and general counsel Thaddeus Bereday — were indicted in March 2011, and are awaiting trial.
Evidence against them includes taped conversations between executives discussing how they could duplicate their bills to the state. The executives also discussed plans to save money by terminating coverage for neonatal babies and terminally ill patients, and throwing parties to reward employees who ousted expensive enrollees, according to whistle-blower documents.
Fast forward a mere few months since the ink almost dried on the settlement.
Saying it's changed, WellCare wants in on state Medicaid contracts
WellCare's decision to bid, though not unexpected, has sparked an outcry from critics who say they wonder how badly a company must act before it is banned from government contracts — and from serving the state’s most vulnerable residents.
WellCare officials maintain that the company has changed in the two years since it agreed to pay a $137.5 million fraud settlement amid accusations the company bilked the state’s Medicaid and Healthy Kids programs and that it systematically dumped patients with expensive health needs.
“I think we have a highly competent and ethical group now running the company,” said former U.S. Sen. Bob Graham, a paid director on the company’s board and chairman of a committee to ensure the company acts ethically and complies with regulations. “Our service will be our best evidence of our corporate integrity.”
Our service will be our best evidence of corporate integrity? Fool me once...
Let them serve time outside the system a while before deciding performance is evidence of that. That's what the inquiry into responsibility is meant to look at: past performance. For goodness sake, we require doctors to wash their hands, and even cafe cooks, before they return to their next job.
If all a failed contractor has done is rearrange his or her deckchairs, it will sink again. And where you have the same board, the same owners, replacing a few executive operators is simply that.
And the settlement payments? Just the cost of doing business any way it can. Like hiring actors for shills.
The only time the government should give a contractor the benefit of doubt to allow future service covenants to indicate responsibility is when it does not have a past record of poor, or fraudulent, behaviour.
WellCare Settles Massive Healthcare fraud
The settlement allows the company to continue providing services under the Medicare and Medicaid programs.
Like most major health care fraud cases, the WellCare cases were successful because concerned employees and insiders came forward. The allegations against the company not only impacted on taxpayers (Medicare is a federally funded program) but involved patient health and safety as well.
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