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WellCare Ex-Exec Sentenced in $35M Medicaid Fraud

By John Commins  
   November 27, 2017

Former general counsel was part of a scheme among top executives at WellCare in 2006 to inflate expenditures for behavioral health in the company’s annual reports to reduce payback obligations.

A fifth former executive at WellCare Health Plans has been sentenced for his role in a $35 million Medicaid fraud scheme.

Thaddeus M.S. Bereday, 52, of Tampa, FL received a six-month prison sentence this month, after pleading guilty in June to one count of making a false statement in connection with healthcare matters, the U.S. Department of Justice said in a media release.

A federal judge in Tampa also ordered Bereday to serve three years of supervised release that includes one year of home confinement and a fine of $50,000.

Bereday was general counsel at WellCare’s Medicaid HMOs StayWell and Healthease in 2006. According to a plea agreement, Bereday admitted that he and four other executives submitted inflated expenditures in the company’s annual reports to the Florida Medicaid Program that reduced the HMOs’ payback obligations for behavioral healthcare services.  

In 2013, a jury found the four other executives guilty for their roles in the scheme. They are:

  • Todd S. Farha, former WellCare CEO, who was convicted of two counts of healthcare fraud and sentenced to three years in prison;
  • Paul L. Behrens, former WellCare CFO, who was convicted of two counts of making false statements relating to healthcare matters and two counts of healthcare fraud, and received a two-year prison sentence;
  • William L. Kale, former vice president of Harmony Behavioral Health Inc., a subsidiary of WellCare, who was found guilty of two counts of healthcare fraud and was sentenced to one year and one day in prison;
  • Peter E. Clay of Wellesley, Mass., WellCare’s former vice president of medical economics, was found guilty of making false statements to a law enforcement officer, and sentenced to five years’ probation.

The convictions were all upheld by a federal appellate court in 2016.

In 2009, WellCare agreed to pay $40 million in restitution, forfeit another $40 million, and cooperate with the government’s criminal investigation. The company complied with all of the requirements and the criminal information was later dismissed.

John Commins is a senior editor at HealthLeaders.

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