According to the WSJ, the recent raid on WellCare was prompted by fraud allegations:
[The raid] was spurred at least in part by allegations that the company inflated the amount it spent on mental-health care in order to keep money it should have refunded to Florida’s Medicaid program.
But the allegations were made pursuant to a qui tam lawsuit:
The investigation followed the filing of a so-called whistleblower lawsuit by a former financial-department employee of Harmony Behavioral Health, a WellCare subsidiary, this person said.
What’s a qui tam lawsuit? Pursuant to a controversial 1986 amendment to the False Claims Act, a company’s employees and competitors can file an anonymous lawsuit against it (on behalf of the government).
Why would they do that? Well, the feds give them a piece of the action. In a suit involving tens of millions of dollars, like this one, a “whistleblower” stands to become an overnight millionaire. Which means the incentives do not encourage a “not guilty” finding.
So, the WellCare “investigation” may or may not be legitimate. The company has not been actually charged with anything. That will not, of course, prevent the “news” media and various Lefty bloggers from convicting WellCare (and privatization) without a trial.
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