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Carrier Splits Top Post And Warns Of Filing Delays

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The board of a company that runs Medicare plans, Medicaid plans and other government health plans has accepted the resignations of 3 top officers.

Todd Farha is stepping down from the posts of chairman, president and chief executive officer of WellCare Health Plans Inc., Tampa, Fla., according to the WellCare board.

Charles Berg, who was chief executive of Oxford Health Plans Inc., Trumbull, Conn., from 2002 to 2004, is now WellCare’s chairman, the company’s board says.

Heath Schiesser, who has been a senior advisor focusing on WellCare’s medical products, will take over as president and chief executive, the board says.

The move to replace Farha with Berg and Schiesser “is in the best long-term interest of the company to provide new leadership,” the WellCare board says.

Farha could not immediately be reached for comment.

The WellCare board also has accepted the resignations of Paul Behrens, the company’s chief officer, and Thaddeus Bereday, the company’s general counsel, the board says.

“Farha, Behrens and Bereday have agreed to assist in an orderly transition to new management by remaining as non-executive employees through March 31,” the WellCare board says.

WellCare has started looking for a new CFO and a new general counsel, the board says.

Berg, the new chairman, has been working for a private equity firm since January 2007. He has a bachelor’s degree from Macalaster College and a law degree from Georgetown University.

Schiesser has a bachelor’s degree from Trinity University and a master’s degree from in business from Harvard University.

In October 2007, WellCare reported that federal and state agencies had searched the company’s headquarters.

“WellCare continues to cooperate with the U.S. Justice Department, the Florida attorney general’s office and the other agencies involved in the investigation,” the WellCare board says. “The company believes that to date the investigations are principally focused on the relationships of the company’s Florida health plans with the company’s behavioral health subsidiary, Harmony Behavioral Health.”

But, at this point, company does not know the full scope of the government’s investigation, the WellCare board says.

“The company does not know whether the investigations may expand to other areas or the extent to which such investigations might lead to fines, penalties, operating restrictions or impacts on the company’s historical financial statements,” the WellCare board says.

“In addition, the company has received requests for information from the Securities and Exchange Commission,” the WellCare board says. “The company is also responding to subpoenas issued by the state of Connecticut attorney general’s office involving transactions between the company and its affiliated companies and their potential impact on the costs of Connecticut’s Medicaid program.”

Meanwhile, a special WellCare board committee is conducting an independent investigation of its own, the board says.

WellCare has not yet filed a Form 10-Q quarterly report with the SEC for the third quarter of 2007, and it does not expect to file its Form 10-K annual report for 2007 on time, the board warns.

The board says the company also may be late with filing one or more 2008 forms 10-Q.


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