WellCare Shares Jump as Company Replaces CEO
WellCare Health Plans, a managed care provider undergoing a federal probe, on Friday replaced Chief Executive Todd S. Farha, announced the resignations of other top executives and said its latest annual report and other filings will likely be late.
In after-hours trading, the company's stock added $3.22, or 7.5 percent after ending Friday up 2.06 percent.
Farha, along with Chief Financial Officer Paul Behrens and General Counsel Thaddeus Bereday, each resigned their respective positions, WellCare said. Farha also served as the company's chairman and president.
WellCare named Charles G. Berg as executive chairman and Heath Schiesser as president and chief executive, effective immediately.
Berg, 50, previously served as chief executive of Oxford Health Plans. Since last January, he has been a senior adviser to Welsh, Carson, Anderson & Stowe, a private equity firm.
Schiesser, 40, was previously WellCare's senior vice president for marketing and sales, and president of WellCare Prescription Insurance.
The company said its board felt it was "in the best long-term interest of the company to provide new leadership."
In a separate statement, Farha said he was leaving "to pursue other entrepreneurial interests." He said he will remain with the company through March 31, and will be able to consult for WellCare through June 30.
Farha said he took "great pride" In WellCare's success. "We transformed a small struggling health plan into a high-quality, health-care company serving more than 2 million low-income and senior citizens in all 50 states."
However, the company's Tampa, Fla., headquarters were raided on Oct. 24 by the FBI, the U.S. Department of Health and Human Service Office of Inspector General, and the Florida attorney general's Medicaid Fraud Control unit. WellCare has since been named in various class action complaints, a whistleblower lawsuit, and is dealing with requests for information from the Securities and Exchange Commission and Florida state regulatory authorities.
Because of the ongoing investigations, WellCare said "it will not be in a position to file its Form 10-K" for last year or quarterly forms in 2008 "on a timely basis."