The long saga of a Medicaid managed care fraud case is coming to a close as three former executives head to federal prison, offering a cautionary tale for public benefits contracting.

Former WellCare CEO Todd Farha has been sentenced to three years in prison and fined $50,000, after being found guilty on two counts of healthcare fraud. Between 2003 and 2007, according to the court, Farha and other company executives schemed to submit false documentation to meet Florida’s 2002 medical cost ratio rule, requiring 80 percent of Medicaid behavioral health premiums to be spent on certain services or otherwise rebated back to the state — one of a number practices that drew concern from a whistleblower.

Paul Behrens, former WellCare CFO, and William Kale, former government affairs VP, are also headed to prison, Behrens for two years and Kale for one. Former WellCare vice president of medical economics Peter Clay, who was taped saying “This is fraud” emerged from the scandal without incarceration, fined $10,000 and ordered to provide 200 hours of community service.

Tampa-based WellCare was charged in 2009, but ended up being offered a deferred-prosecution agreement and cooperating with the investigation. It later paid $40 million and forfeited $40 million to the government for the agreement, and paid $137 million in civil fines and penalties.

Former WellCare senior finance analyst Sean Hellein helped launch the civil case as a whistleblower, performing 18 months of undercover work for the FBI. Not long after Farha, then a 33-year-old Harvard MBA, took over as WellCare CEO in 2002, Hellein noticed cost-cutting strategies like disenrolling high-cost beneficiaries and found general “culture of corruption,” as he told the Tampa Bay Times. Eventually he reached out to a lawyer and the FBI, agreeing to look out for potential fraud in the course of his work.

In 2007, Hellein ended up taping a meeting of executives trying to find ways to account for inflated behavioral health medical cost ratio, amid questions from Florida’s Agency for Health Care Administration. In October of that year, some 200 state and federal agents raided the company’s offices and later garnered three other employee whistleblowers. Hellein received $20 million from the civil penalties, although he and his lawyers believed the $137 million underestimated the amount the company had erroneously obtained from the state.

Now as WellCare searches for a permanent CEO to lead the “next chapter,” as board chairman David Gallitano put it, the company is going after what remains of Farha, Behrens and Kale’s estates, demanding $375 million between them in restitution payments.

Though thought to be a potential acquisition target by some analysts, WellCare has rebounded as a publicly-traded company since the scandal. It now administers Medicaid and drug benefits for about 3.5 million beneficiaries in nine states.

Under the Affordable Care Act, commercial, Medicare and Medicaid insurers face new medical cost ratio (MCR) requirements, stipulating that they spent a certain percentage of premium revenue on rendered services, usually between 80 percent and 90 percent, or otherwise rebate governments or consumers.

While the WellCare case involved what was apparently a conspired manipulation of MCR accounting, compliance with the requirement could prove to be a new target for regulators, auditors and whistleblowers.