Amerigroup near settling Medicaid fraud damages

[AlphaCentauri]

Source: Chicago Tribune

Insurer cherry-picked its patients, former exec says

State and federal authorities are close to settling a lawsuit with a former Illinois health-insurance provider that was found liable for fraud for intentionally not enrolling pregnant women and other high-risk patients in its Medicaid plan.

In 2006, a federal jury in Chicago ordered Virginia-based Amerigroup Corp. to pay $144 million in damages to Illinois and the federal government, which jointly administer the Medicaid insurance program for poor people. A federal judge later levied $190 million in civil fines against Amerigroup for filing more than 18,000 false Medicaid claims, bringing the total judgment to $334 million.

Amerigroup appealed the verdict but earlier this year the parties entered settlement talks, according to court documents. The parties reported to the 7th Circuit Court of Appeals last week that they have "reached agreement as to many issues," and need some additional time to resolve a few outstanding issues. Court documents did not provide any details of the possible settlement.

An Amerigroup spokesman confirmed Monday that settlement talks were ongoing but declined further comment. A settlement may be announced Thursday when Amerigroup is scheduled to release it second-quarter earnings.

A settlement would bring an end to an embarrassing episode for the company and the state department that oversees Medicaid programs. Illinois paid Amerigroup a flat fee per insured person that accounted for some having more medical needs than others.


Read more: http://www.chicagotribune.com/business/chi-tue-amerigroup-jul22,0,874049.story

[Trillo]

1. The original idea of insurance was for everyone to pool resources.

Now it seems that insurance markets are all figured based upon individual risk (all hail and bow down before the MBA). How is this better than a system where some people cannot afford medical care?