A Florida health carrier says its board has formed a 3-member special committee to respond to government investigations and the investor lawsuits the investigations have triggered.
WellCare Health Plans Inc., Tampa, Fla., says Neal Moszkowski, the co-chief executive officer of TowerBrook Capital Partners L.P., New York, and a former chairman of the WellCare board, will lead the special committee.
WellCare manages Medicare and Medicaid plans.
Many different federal and state agencies joined to execute a sealed search warrant at the company’s headquarters Wednesday.
The list includes the U.S. Department of Justice, the Federal Bureau of Investigation, the U.S. Department of Health and Human Services inspector general’s office and the Florida attorney general’s Medicaid fraud control unit, WellCare says.
On Thursday, WellCare received requests for information from the U.S. Securities and Exchange Commission, the company says.
“The special committee is authorized to monitor developments in these investigations and to oversee the company’s response to them,” WellCare says. “It is also authorized to facilitate communication between the company’s management and its board of directors regarding these matters.”
The special committee can hire its own lawyers and other advisors at WellCare’s expense, WellCare says.
“As previously stated, we are cooperating with all federal and state authorities,” said WellCare Chairman Todd Farha in a statement. “I am confident that the newly formed special committee will provide the independent oversight and support needed to help the company effectively address any issues that may arise.”
Farha says the company’s primary focus is on making sure that operations are running smoothly, the company says.
WellCare is financially sound and has $1 billion in cash and cash equivalents on hand, the company says.
The company processed 75,000 claims Wednesday, and it handled more than 10,000 calls Thursday with an average answering speed of 2 seconds, the company says.
A law firm, Kahn Gauthier Swick L.L.C., New Orleans, is in the process of organizing a class action suit against WellCare that would be filed in the U.S. District Court in Tampa.
WellCare and its executives “materially overstated the company’s profitability by failing to properly account for the company’s health care expenses and results of operations and by artificially inflating the company’s financial results,” the firm alleges in a press release announce the effort to organize the suit.