The board of WellCare Health Plans is looking for a new CEO, and is hoping to find someone to expand Medicaid and Medicare managed care.
The Tampa-based company announced that board chairman David Gallitano is taking over as interim CEO as a national search commences to find a replacement for outgoing CEO Alec Cunningham, who was named the company's leader in 2009.
Calling Cunningham's contributions significant, Gallitano, a WellCare director since 2009, said in a media release that "the board felt that it was necessary to identify a new experienced leader to help write the next chapter for WellCare."
"I am looking forward to working with the management team to continue progress towards WellCare's vision to be the leader in government-sponsored healthcare programs," said Gallitano, who leads the investment and consulting firm Tucker Advisors and became board chair this past May.
Cunningham worked as a business development and compliance VP for WellPoint before joining WellCare in 2005, heading the company's Florida and Hawaii divisions.
In the wake of the Medicaid fraud charges in 2007, when the FBI raided WellCare's headquarters and stocks tanked, Cunningham was asked to take over in 2009, and stocks have risen 73 percent since and up 37 percent this year, according to Citi Research managed care analyst Carl McDonald.
That financial performance considered, WellCare's board may face some challenges, McDonald wrote in an investors note.
A "CEO with significant experience running a much larger company will likely only be willing to come to WellCare if they are given carte blanche, particularly considering the board has shown a willingness to abruptly push the eject button on a very successful CEO."
WellCare shares ended up falling by 6 percent Friday, the day the search for a new CEO was announced, along with third-quarter financial results.
The company's adjusted net income per diluted share for the third quarter of 2013 increased $0.51 over last year, on premium revenue of $2.5 billion that grew 38 percent year over year.
WellCare is raising its full-year outlook for premium revenue, now expecting up to $9.4 billion as opposed to $9.25, but it's reducing per share income by about a dime, from $4.70 to $4.90 per share to up to $4.80 per share.
WellCare also recently announced a round of layoffs, mostly in Florida, reducing its workforce by about 3 percent (or 150 employees). Offsetting that, WellCare may soon hire another 500 workers for a new managed care contract. The Florida Agency for Healthcare Administration recently recommended WellCare receive Medicaid contracts in eight of the state's eleven regions.