April 24, 2017 / 1:59 PM / 4 months ago

UPDATE 1-U.S. high court won't review WellCare ex-CEO fraud conviction

(Adds background from case, paragraphs 3-8)

By Andrew Chung

April 24 (Reuters) - The U.S. Supreme Court on Monday declined to hear an appeal by former WellCare Health Plans Inc Chief Executive Todd Farha of his 2013 fraud conviction for his role in a scheme to cheat the Medicaid health insurance program for the poor.

Farha began serving a three-year sentence at a minimum security federal prison in Alabama after the Atlanta-based 11th U.S. Circuit Court of Appeals upheld his conviction in August 2016. Farha had asked the justices to overturn his conviction, taking issue with the trial judge's handling of his case.

Farha and other executives of Tampa, Florida-based insurer WellCare were indicted in 2011. A federal jury in Tampa found them guilty of filing expense reports to Florida's state healthcare administration overstating the amount the company's subsidiaries spent on mental health services for Medicaid patients. The scheme inflated WellCare's profits, boosting rewards for the executives.

Under a 2002 Florida law, companies were required to spend 80 percent of Medicaid dollars they received for mental health services, and return the difference if they spend less.

According to legal papers, Tampa-based WellCare created a new unit to pay mental health care providers while retaining millions of dollars in Medicaid funds that should have been refunded.

Farha asked the Supreme Court to review the case. He said that he did not know the submitted reports were false, and that the trial judge mistakenly allowed the jury to convict him on a standard of "deliberate indifference" to the truth.

The government asked the court to reject that claim. Farha, it argued, "was convicted on a theory of actual knowledge of falsity, not deliberate indifference to the truth."

WellCare has paid out more than $200 million in settlements with government regulators and whistleblowers since 2009, according to the Department of Justice.

Reporting by Andrew Chung; Editing by Will Dunham

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