WellCare Health Plans Names Chief Executive Officer

WellCare Health Plans Inc. named Alec R. Cunningham, president of its Florida and Hawaii division, as its chief executive officer, effective Dec. 28. He succeeds President and CEO Heath Schiesser, who is leaving the company at the end of this year.

WellCare (NYSE: WCG) said Cunningham has substantial experience in government managed care. The Tampa-based health insurer, with about 2.3 million members across the United States, provides managed-care services exclusively for government-sponsored health insurance programs such as Medicare and Medicaid.

Cunningham joined WellCare’s executive team in 2005 as vice president of business development, where he secured and implemented new Medicaid contracts in Georgia, Ohio, and Hawaii. Recently, he was president of WellCare's largest operating division, serving Medicare and Medicaid members in Florida and Hawaii.

Before joining WellCare, Cunningham was vice president of business development and compliance at WellPoint Inc. (NYSE: WLP), where he developed and managed health plans for state-sponsored programs.

Charles G. Berg, WellCare's executive chairman, said in a statement that the company has "made significant progress over the past two years."

A WellCare spokeswoman declined to comment beyond the company's statement.

This past summer, Schiesser, who was named president and CEO of WellCare in January 2008 during an investigation of the company, told the board of directors that he planned to resign once a successor is found. He also planned to resign from his director position when the new president and CEO was named (BestWire, July 1, 2009).

In January 2008, the top three executives at WellCare, including Todd Farha, chairman, president and CEO, resigned. Their resignations came three months after the Federal Bureau of Investigation, the U.S. Department of Health and Human Services/Office of Inspector General and the Florida Attorney General's Medicaid Fraud Control Unit issued a search warrant at the company's headquarters (BestWire, Oct. 25, 2007).

Schiesser, then senior vice president for marketing and sales and president of WellCare's prescription insurance business, immediately was named president and CEO.

In May of this year, the health insurer agreed to pay $80 million to settle the investigation, which alleged it defrauded the Florida Medicaid and Florida Healthy Kids programs by $40 million from mid-2002 through 2006 by falsely inflating what it spent on medical services. The agreement allowed WellCare to avoid a fraud conviction (BestWire, May 6, 2009).

Not long after, the company said it would eliminate about 360 positions, or 9% of its work force, as part of a restructuring to cut costs related to its decision to withdraw from Medicare Advantage private-fee-for-service plans for seniors in 2010 (BestWire, May 27, 2009).

On the morning of Dec. 28, WellCare's stock was trading at $38.31 a share, up 0.42% from the previous close.