WellCare enrollment's booming, in spite of investigation

 2/14/2008 © Florida Health News

Even though it’s burdened by an ongoing fraud investigation, WellCare Health Plans Inc. of Tampa has shown “extraordinary” growth in its nationwide Medicare health plan enrollment this selling season, according to Oppenheimer & Co. Tampa-based WellCare added 32,000 new Medicare Advantage members between Nov. 15, when the open-enrollment sign-up for 2008 began, and Jan. 11, when federal authorities paused to add up the totals. 
In a report released Wednesday night, Carl McDonald and two other analysts also said:
-- Universal Health Care of St. Petersburg lost about 30,000 members -- almost one-third of its enrollment -- between January and February, while the company was still unable to market its Any, Any, Any plan, a form of managed care that has no physician network. The plan was frozen a year ago by state insurance authorities, who said it had failed to keep enough funds  on reserve to account for its rapid growth.  Last week, Medicare authorities allowed Universal to resume marketing and enrollment for the plan, after the founder and president, Dr. Akshay Desai, proved to the state that he had adequate financial reserves.  Now, the company is staging numerous seminars each day in hopes of attracting its former members back to their medical home.
--Humana, Florida's largest Medicare health plan company, is making great strides in Medicare enrollment nationally. Membership shot up more than 90,000 since open enrollment began, and the company is forecasting a gain of 200,000 to 250,000 new Medicare members this year.
--The industry has added over 625,000 new Medicare enrollees this year so far, outpacing last year’s growth of about 540,000. If this trend continues, the industry will add 1.2 million new Medicare members in 2008. That would send Medicare Advantage enrollment above 10 million lives, with estimated premiums of about $96 billion, nearly doubling the premiums generated in 2005.
--The fastest-growing product is the no-network form of Medicare Advantage, like Any, Any, Any. This type of plan, called private fee-for-service, triggered numerous complaints last year and is the No. 1 waster of Medicare funds, according to the Medicare Payment Advisory Commission. MedPAC estimates that private fee-for-service (PFFS) plans receive 19 percent more in federal funds than it would cost for traditional Medicare.
But the big surprise in the new numbers from the Centers for Medicare and Medicaid Services, according to Oppenheimer, is WellCare. Its growth in Medicare health plan enrollment so far this year has been "far better than we anticipated,” the report said.
WellCare added 32,000 new Medicare Advantage members between Nov. 15, when the open-enrollment sign-up for 2008 began, and Jan. 11, when federal authorities paused to add up the totals, the Oppenheimer team reported. Enrollment for 2008 continues through March 31, when members will have to stick with their plan for the remainder of the year, with a few exceptions.
WellCare, which had impressive growth last year, is “actually doing better this year despite the distractions,” McDonald wrote. They include the federal-state Medicaid fraud investigation, resignation of the company’s top three executives last month, and a whistleblower suit filed by a former internal investigator.
“Chatter” from consultants and agent handlers links WellCare’s strong performance to settlement of financial disputes with brokers, the Oppenheimer analysts wrote. “Apparently there was some issue with WellCare getting commission payments to the agencies in a timely manner, but that is no longer a concern,” they wrote.
Brokers are now forecasting growth of 50,000-60,000 lives this year for WellCare, the report said. McDonald’s team calculates that every 10,000 new Medicare Advantage members for WellCare add about $100 million in revenue and $5 million net income. Most of the premium payments come from the federal treasury.
WellCare, which exclusively contracts with governments for care of beneficiaries, registered dramatic growth in recent years in both Medicaid and Medicare. Last week Hawaii announced that WellCare was one of two companies that would share in a $1.24 billion Medicaid contract. Medicare became one of WellCare’s major clients with the creation of the Part D prescription drug benefit. The company bid low enough to be one of 10 companies chosen nationwide to receive automatic enrollments of low-income beneficiaries who did not make the choice themselves. Thus, more than 900,000 drug-program members were added to the WellCare membership group in the past two years, sending overall enrollment in the company’s various offerings to 2.3 million.
But the uncertainty over what may result from the Medicaid investigation sent WellCare’s stock down from a high of $128 in mid-October to less than $21 following the raid Oct. 24. The stock price has gradually edged back up in the absence of arrests or indictments, and was trading at around $49 the last couple of days.  No one at WellCare has been charged with wrongdoing, but the company’s top three executives resigned last month following negotiations with a committee of independent directors.