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WCG up 43 %premarket: WellCare Delaying 3rd-Quarter Results
Monday November 5, 7:45 am ET
WellCare Delaying 3rd-Quarter Results Until It Completes Probe Following Headquarters Raid


TAMPA, Fla. (AP) -- Health insurer WellCare Health Plans Inc. said Monday it is delaying its third-quarter financial results until it completes an independent investigation, following a raid by state and federal authorities and a request for information from the Securities and Exchange Commission.

Last month agents from the Federal Bureau of Investigation, the U.S. Department of Heath and Human Services and the Florida Attorney General's Medicaid Fraud Control Unit searched the company's Tampa headquarters, but WellCare and authorities did not say what the search was about.

WellCare said at the time it was fully cooperating with the investigations and that its patients' services had not been affected.

The company has formed a special committee of its board to conduct an independent investigation into matters raised as part of the ongoing investigations and inquiries. The committee will develop and recommend to the board any remedial measures it deems may be warranted, WellCare said.

The company also warned it may have to delay its full-year results, depending on when the committee completes its work. WellCare said it will not issue earnings guidance pending completion of the committee's investigation.

WellCare said it learned a former employee of its special investigations unit filed a "qui tam" or whistleblower action late last month against several defendants including the company and one of its subsidiaries. The complaint is sealed, which WellCare said prevents it from determining if the allegations relate to federal and state investigations or a report in the Wall Street Journal. The report claims the investigations relate to WellCare inflating the amount it spent on mental health care so it could keep money it should have refunded to the state's Medicaid program.

In preliminary results, WellCare said total third-quarter revenue climbed 42 percent to $1.43 billion primarily on increased membership and Medicare product growth.

Wellcare shares rose $12.94, or 47.3 percent, to $40.32 in premarket trading after closing at $27.37 on Friday.

http://biz.yahoo.com/ap/071105/wellcare_delay.html?.v=1