form8-k.htm
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
8-K
CURRENT
REPORT
Pursuant
to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of
Report (Date of earliest event reported): January 30,
2009
WELLCARE
HEALTH PLANS, INC.
(Exact
name of registrant as specified in its charter)
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Delaware
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001-32209
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47-0937650
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(State
or other jurisdiction
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(Commission
File Number)
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(IRS
Employer
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of
incorporation)
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Identification
No.)
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8735
Henderson Road, Renaissance One
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Tampa,
Florida
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33634
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(Address
of principal executive offices)
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(Zip
Code)
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Registrant’s
telephone number, including area code:
(813) 290-6200
Not
Applicable
(Former
name or former address, if changed since last report.)
Check the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions (see General Instruction A.2. below):
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¨
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Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
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Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
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Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
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Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
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Item
1.02 Termination
of a Material Definitive Agreement
Special
Note — This Current Report on Form 8-K contains forward-looking statements that
are based on our current expectations. Actual results may differ
materially from those expressed or implied by those forward-looking statements
because of a number of risks and uncertainties. See “Cautionary Note Regarding
Forward-Looking Statements” below.
HealthEase
of Florida, Inc. (“HealthEase”)
and WellCare of Florida, Inc. d/b/a StayWell Health Plan of Florida (“WCFL”),
both wholly-owned subsidiaries of WellCare Health Plans, Inc. (“WellCare”),
are parties, respectively, to the following contracts with the Florida Agency
for Health Care Administration (“AHCA”):
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1.
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Medicaid
reform contract No. FAR001 (the “HealthEase
Reform Contract”), dated June 26, 2006, between AHCA and
HealthEase;
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2.
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Medicaid
reform contract No. FAR009 (the “WCFL Reform
Contract”) dated June 26, 2006, between AHCA and WCFL (together
with the HealthEase Reform Contract, the “Medicaid
Reform Contracts”);
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3.
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Medicaid
non-reform contract No. FA619 (the “HealthEase
Non-Reform Contract”), dated September 1, 2006, between HealthEase
and AHCA; and
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4.
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Medicaid
non-reform contract No. FA615 (the “WCFL
Non-Reform Contract”), dated September 1, 2006, between WCFL and
AHCA (together with the HealthEase Non-Reform Contract, the “Medicaid
Non-Reform Contracts”).
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In a
letter dated January 30, 2009, WellCare notified AHCA (the “Notice”)
that it was terminating, effective May 1, 2009, its Medicaid Reform
Contracts. WellCare also notified AHCA that, effective May 1, 2009,
HealthEase and WCFL would withdraw from providing services in a total of 13
Florida counties (collectively, the “Withdrawn
Non-Reform Counties”) under the Medicaid Non-Reform
Contracts.
In a
letter dated February 4, 2009, WellCare notified AHCA that, based on information
received after the submission of the Notice, WellCare has rescinded its notice
of withdrawal from the Withdrawn Non-Reform Counties. By letter dated
February 4, 2009, AHCA acknowledged WellCare’s rescission. These
subsequent letters reconfirmed WellCare’s termination of the Medicaid Reform
Contracts effective May 1, 2009.
Under the
Medicaid Reform Contracts, HealthEase and WCFL provide health care programs in
Duval and Broward counties to recipients of Temporary Assistance for Needy
Families and Supplemental Security Income, as well as to the HIV/AIDS specialty
population. WellCare receives premiums from the State of Florida for
providing these services pursuant to the Medicaid Reform
Contracts. Premiums are paid on a capitated basis and vary based on
the age, gender and health status of the member, among other
things. Copies of the rate tables setting forth the rates payable to
WellCare under the Medicaid Reform Contracts can be found in Amendments Nos. 9
and 10 to the HealthEase Reform Contract and Amendments Nos. 9 and 10 to the
WCFL Reform Contract, which are attached as Exhibits 10.1, 10.2, 10.3 and 10.4,
respectively, to WellCare's Current Report on Form 8-K filed with the U.S.
Securities and Exchange Commission on September 12, 2008.
WellCare’s
decision to terminate the Medicaid Reform Contracts was based on developments
during a recent special session of the Florida legislature in which budget cuts
to Medicaid managed care appropriation were approved. WellCare determined that
its ability to continue to operate under the Medicaid Reform Contracts, after
taking into account the effect of the budget cuts, was not economically
feasible.
WellCare
has requested that AHCA cease enrolling new members into the programs offered
under the Medicaid Reform Contracts.
No
contractual termination penalties will be incurred by WellCare in connection
with the termination of the Medicaid Reform Contracts. WellCare is
not yet able to determine whether it will incur any additional costs related to
this termination. This termination does not independently affect
the participation of HealthEase and WCFL in the Florida Healthy Kids program or
federal Medicare programs.
As of
December 31, 2008, WellCare had a total of approximately 1.3 million Medicaid
segment members, approximately 408,000 of which were in its Florida Medicaid
health plans, and approximately 80,000 of which were enrolled in plans offered
under the Medicaid Reform Contracts.
Item
8.01
Other Events.
On
February 4, 2009, WellCare issued a press release announcing the termination of
the Medicaid Reform Contracts, a copy of which is attached to this Current
Report on Form 8-K as Exhibit 99.1.
This
Current Report on Form 8-K contains forward-looking statements within the safe
harbor provisions of the Private Securities Litigation Reform Act of
1995. All statements other than those that are purely historical in
nature are considered to be forward-looking statements. Words such as
“expect,” “anticipate,” “believe,” “estimate,” “intend,” “plan,” “potential” and
similar expressions also identify forward-looking statements.
Investors
should not rely on forward-looking statements because they are subject to a
variety of risks, uncertainties and other factors, many of which are outside of
WellCare’s control, which could cause actual results to differ materially from
its expectations. These forward-looking statements include, but are
not limited to, WellCare’s statements regarding the timing and effect of the
termination of the Medicaid Reform Contracts. Such statements are
subject to numerous factors, many of which are outside of WellCare’s control,
that may cause WellCare’s termination to differ from its current
expectations.
For a
discussion of a variety of risk factors that may affect the forward-looking
statements in this Current Report on Form 8-K, see “Item 1A — Risk Factors”
in our Annual Report on Form 10-K for the year ended December 31, 2007 as filed
with the U.S. Securities and Exchange Commission on January 26,
2009.
Item
9.01 Financial
Statements and Exhibits.
(d) Exhibits.
The
following exhibits are filed as part of this report:
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99.1
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Press
release dated February 4, 2009
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SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, as amended, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
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Date: February
4, 2009
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WELLCARE
HEALTH PLANS, INC.
/s/ Thomas L.
Tran
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Thomas
L. Tran
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Senior
Vice President and Chief Financial
Officer
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Exhibit No.
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Description
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99.1
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Press
release dated February 4, 2009.
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