Amerigroup Settles Federal and State Medicaid Fraud Claims for $225 Million

[orleans]

WASHINGTON,, Aug 14, 2008 /PRNewswire-USNewswire via COMTEX/ -- Amerigroup Corporation has agreed to pay $225 million to resolve claims that it defrauded the Illinois Medicaid program, the Justice Department and the Attorney General of Illinois announced today. Amerigroup, which is headquartered in Virginia Beach, Va., operates managed health care plans throughout the United States.

Today's settlement resolves allegations that Amerigroup and its Illinois subsidiary systematically avoided enrolling pregnant women, and unhealthy patients in their managed care program in Illinois. Amerigroup was paid by the United States and the state to operate a Medicaid managed care health plan in Illinois to provide health care to low income people. Amerigroup was required by law to enroll all eligible beneficiaries. The United States and the state of Illinois brought claims against the company alleging that it violated this requirement and avoided enrolling unhealthy patients, as well as pregnant women, who were more costly to treat and would have eroded Amerigroup's profit margin.

In October 2006, a jury found Amerigroup liable under the federal False Claims Act and the Illinois Whistleblower Reward and Protection Act. The court entered a $334 million judgment against Amerigroup, which then filed an appeal with the U.S. Court of Appeals for the Seventh Circuit in Chicago seeking a reversal of the judgment. As part of the settlement, Amerigroup will dismiss its appeal and has agreed to enter into a Corporate Integrity Agreement (CIA) with the Office of Inspector General for the U.S. Department of Health and Human Services (HHS).

"The Justice Department is committed to ensuring that recipients of federal health care funds adhere to the law, so that appropriate health care services are provided to all eligible patients," said Gregory G. Katsas, Assistant Attorney General for the Civil Division.

"A settlement of this magnitude sends the clear message that this office takes health care fraud very seriously," said Patrick J. Fitzgerald, U.S. Attorney for the Northern District of Illinois. "This case also illustrates the perils a defendant faces in taking a case such as this to trial."

"This settlement should send a clear message that the state of Illinois will not tolerate illegal conduct in the provision of healthcare for Illinoisans," said Illinois Attorney General Lisa Madigan. "I am pleased that our work on this case will bring millions of dollars to the State of Illinois."
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