WellCare taps Graham for board
The company provides Medicare and Medicaid managed-care plans.
By KRIS HUNDLEY
Published May 1, 2007
As Democrats in Congress push for cuts in Medicare Advantage reimbursements, WellCare Health Plans Inc. has added a powerful new advocate to its board.
Bob Graham, former Democratic U.S. senator and Florida governor, has been named a director of the fast-growing Tampa company which provides Medicare and Medicaid managed care plans to more than 2.25-million people in eight states.
Graham, 70, received $250, 000 worth of stock options for joining WellCare's board, plus another $250, 000 worth of shares of restricted stock, which will vest over a two-year period. He will also receive compensation of $27, 500 for service on the board, which met five times last year.
News of Graham's appointment to the nine-member board came on a day when WellCare surprised Wall Street with a partial earnings release. Trading in the company's stock was briefly halted when it reported that earnings for the three months ending March 31 were $25-million, up 48.9 percent, or 60 cents per share. Revenue for the first quarter was $1.24-billion, up 69.7 percent from a year ago. WellCare will release its complete financials, including its medical claims costs, on May 7. WellCare's shares declined Monday, closing at $80.59, down $5.91.
WellCare, which received nearly $4-billion in revenue from government sources last year, could be hit hard if state and federal lawmakers ratchet back reimbursements. Medicare Advantage plans cost 12 to 14 percent more than traditional Medicare. Matching the private plans' payments to Medicare could save the government $54-billion over the next five years, according to congressional budget analysts.
Graham, who retired from the Senate in 2005, said the challenge for WellCare will be to prove the extra funding over regular Medicare is worth it.
"The HMO industry has to demonstrate through things like coordinated care, particularly of chronic illnesses, and early intervention and prevention measures, that it can justify the additional compensation it has received, " said Graham, who was a member of the Senate Finance Committee which oversees Medicare.
Graham fills a board seat vacated by Dr. Andrew Agwunobi, who spent six months as a WellCare director before being tapped by Gov. Charlie Crist to head Florida's Agency for Health Care Administration. Other WellCare directors with political backgrounds include former Massachusetts Gov. Jane Swift, who is leaving the board in June, and Ruben King-Shaw Jr., who was deputy administrator of the Centers for Medicare and Medicaid Services as well as head of Florida's health care agency before joining the board in 2003.
Graham also serves on the boards of the American Institute of Certified Public Accountants, Norwegian Cruise Lines and ACT, the high school testing service. He also recently joined the 29-member board of advisers at Tampa's H. Lee Moffitt Cancer Center & Research Institute, an unpaid position.
Kris Hundley can be reached at email@example.com or (727) 892-2996.