Here is a link to the story from NASDAQ. Products included are the Sterling Life Medicare Supplement and the Windsor Medicare Advantage book of business. Generally, these deals take 6 or more months to close, so don’t look for any changes this AEP.
Wellcare posted a $36.9 million loss for the first quarter of 2009. The loss was due to higher Medical Expenses, one time charges and lower investment income.
Last week Wellcare announced that they would be exiting the Private Fee for Service Medicare Advantage Marketing in 2010. Although management doesn’t segment out PFFS versus Networked MA versus PDP, it’s pretty safe to say in listening to the call that the Medical Loss Ratio (MLR) on the PFFS was a contributor to WellCare exiting the PFFS business in 2010. PDP was not performing as well as they hoped, but they figured they could fix this in their 2010 bid. Network MA products seemed to be performing the best. The overlap between PFFS plans and Network plans is minimal (10-15%). WellCare remains under CMS Marketing restrictions with hopes of being able to market Networked MA plans and PDP for 2010.
They also announced that they had settled the Government investigation relating to their Medicaid program.
Finally, they announced that they would pay off their Loan Credit Facility on time later this week.
Wellcare currently has approximately 110,000 members in its Private Fee for Service plans. Wellcare will continue to cover these members through December 31st, 2009. These members will have the option of electing another Medicare Advantage plan in their area during the Annual Election Period which runs from November 15th through December 31st, 2009.
If they elect another Medicare Advantage plan, it will be effective on January 1st, 2010. If they do not make an election, they will be automatically re-enrolled in original Medicare as of January 1st, 2010.
Those members with Prescription drug benefits in their Wellcare plan will need to elect a Stand Alone Part D plan (PDP) during the Annual Election Period in order to have coverage with a January 1st, 2010 effective date assuming they wish to return to Original Medicare and need Prescription coverage. If they are electing a Medicare Advantage plan, they can choose a plan which includes Prescription Drug benefits.
Wellcare, which is currently under investigation by the FBI and Florida authorities for Medicaid Fraud, we ordered to stop enrolling new members in it’s Medicare Plans (HMO and PFFS) as well as Part D plans. Abby Block, Medicare’s chief notes, “. . .Wellcare was one of the worst overall performers of all plans”.
Allegations of use of forged enrollment applications, providing misleading information to members and member complaints that are three times the national average.
“The sanctions were imposed after repeated meetings failed to get the company to improve its performance and after alleged violations of marketing and grievance-handling rules.” According to Block.
The sanctions take affect on March 7th.
Wellcare’s stock price fell as much as 30% in after hours trading.
The sanctions do not affect it’s current Medicaid business.
Insurance agents who are currently selling Wellcare will not be able to sell this product on March 7th until further notice.
Insurance agents can compare Medicare Advantage plans in every county in the United States using our Medicare Quote Engine. This is a free online web tool for Insurance Agent Use Only. You can register for instant access by clicking here. You can view all of the carriers we represent by clicking here.
Agents currently selling Wellcare can contact April Ford at our office for alternative products during this shut down. Click here to e-mail April.
This was the second company which was ordered to stop enrolling new customers thus far in 2009. Wellpoint was ordered to stop enrolling new members on January 12th, 2009 and remains under sanctions as it seeks to improve it’s claims and billing processes.