Thursday, October 25, 2007

Medical fraud

Who can we trust?

Not insurance companies.

Here's a article:

WellCare Shares Lose Half Their Value After FBI Raid
By Catherine Larkin

Oct. 25 (Bloomberg) -- WellCare Health Plans Inc., the manager of medical care sponsored by the U.S. government in three states, lost more than half its value on the New York Stock Exchange after disclosing investigations by U.S. and Florida prosecutors.

WellCare dropped by $68.83, or 60 percent, to $46.34 in composite trading at 2:36 p.m. and earlier sank 76 percent. The decline was the biggest since WellCare began public trading in June 2004. WellCare's market value fell to $1.94 billion.

Agents with the Federal Bureau of Investigation and the Florida Attorney General's Medicaid fraud unit searched WellCare's headquarters in Tampa yesterday, according to a statement from James Klindt, acting U.S. Attorney for the Middle District of Florida. Officials didn't describe what they were seeking, and the company declined to elaborate today.

``The underlying reason is unknown, and may not be known for days if not weeks or months,'' said Thomas Carroll, an analyst at Stifel, Nicolaus & Co. in Baltimore, in a note to clients yesterday. When federal agents ``raid a health-care company, the outlook on earnings, legal proceedings, and the entire operations of the company can be questioned.''

Carroll was one of at least three analysts who downgraded WellCare shares to ``sell'' from ``hold'' or ``neutral'' after the raid was announced...

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