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Life Health > Health Insurance > Health Insurance

Former Health Insurer General Counsel Gets 6 Months in Prison

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The former general counsel at Tampa, Florida-based insurer WellCare Health Plans Inc. has been sentenced to six months in federal prison for his role in a scheme to defraud the Florida Medicaid program.

Thaddeus Bereday, 52, was sentenced on Nov. 22 after pleading guilty in June to one count of making a false statement. He faced up to five years in prison when U.S. District Judge James Moody in Tampa sentenced him, but, thanks to his cooperative plea deal, the U.S. Department of Justice had said it would seek to lower the sentence at last week’s hearing.

A lawyer for Bereday, Jack Fernandez of Zuckerman Spaeder in Tampa, declined to comment.

(Related: WellCare, Centene are said to bid for Aetna Medicare assets)

Bereday is one of the latest examples of the federal government’s crackdown on health care fraud, including on professionals. He was indicted in March 2011 along with four other former WellCare executives, according to the DOJ. The company and its executives were accused of submitting inflated expenditure information to the Florida agency that administers Medicaid, and of overstating how much the company’s subsidiaries spent on behavioral health services for Medicaid patients. The scheme lasted from 2003 until 2007, prosecutors said.

A Florida law enacted in 2002 requires companies to spend 80% of Medicaid dollars they receive for behavioral health care on behavioral health treatment. If Medicaid carriers spend less than 80% of the state’s payments on care, they are supposed to return the difference to the state.

As part of his plea, Bereday admitted that he, along with others, knowingly and willfully submitted, on behalf of one of WellCare’s subsidiaries, a false 2006 expense report to the Florida Medicaid program, according to the DOJ.

In addition to being given a prison sentence, Bereday was ordered to pay a $50,000 fine. He was also sentenced to three years of supervised release, including one on house arrest, following the end of his six-month prison term, according to court records. The judge recommended that Bereday serve his time at a medium-security prison in Butner, North Carolina, after he turns himself in on Jan. 3.

Bereday was scheduled to go to trial with his codefendants in 2013, but he did not participate at that time because of health-related issues, according to the DOJ.

Guilty verdicts were returned against the four ex-WellCare executives on fraud-related charges after a 13-week trial. They argued at the time that they had been confused and were trying to cope with a lack of straight answers from state bureaucrats.

—Read U.S. Insurers Facing Tighter Oversight of Medicaid Plans on ThinkAdvisor.

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