WellCare Announces Resolution Of SEC Investigation

TAMPA, Fla. (AP) — Managed care provider WellCare Health Plans Inc. said Monday it will pay a $10 million civil penalty plus interest to resolve a U.S. Securities and Exchange Commission investigation.

A statement from WellCare said the informal investigation involved company filings, and it noted that the insurer restated earnings last July.

WellCare said then it restated results from 2004 into 2007, and it overcharged the states of Illinois and Florida and overstated its profits due to accounting errors. WellCare said the errors caused it to record inadequate liabilities for anticipated premium funds.

Insufficient liabilities were recorded for three businesses: the behavioral health component of WellCare's Medicaid contract with the Florida Agency for Health Care Administration, the "Healthy Kids" contract with Florida Health Kids Corp., and a Medicaid contract with Illinois Department of Health and Family Services.

As a result of the errors, WellCare said it owed the states a total of about $46.5 million.

On Monday, the insurer also said it agreed to a permanent injunction against future violations of "certain provisions of the federal securities law," but it did not admit or deny allegations.

WellCare shares rose 53 cents, or 3 percent, to $17.06 in Monday afternoon trading.