Amerigroup to pay $225M in Medicaid fraud settlement

Amerigroup, the Illinois health plan that refused to enroll high-risk patients in its Medicaid plan, announced that it will pay $225 million to the state of Illinois and the U.S. government to settle False Claims Act allegations. Though the agreement hasn't been signed by both parties, Amerigroup will pay an additional $9 million in legal fees, and will admit no wrongdoing, according to a press release from the company. Amerigroup Corp., based in Virginia, has also agreed to enter into a Corporate Integrity Agreement with the Office of the Inspector General of the U.S. DHHS. The company's second quarter losses add up to $162.5 million--Amerigroup would have netted $36.7 million without the settlement.

In 2006, the company was ordered to pay $144 million in damages to Illinois and the federal government. Later, a federal judge added another $190 million in civil fines against the company, which was found to have filed more than 18,000 false Medicaid claims. Originally, Amerigroup appealed the verdict, but later it entered into settlement talks with the plaintiffs.

Charges against Amerigroup were originally filed in 2002 by Cleveland Tyson, former vice president of government relations at the plan's Illinois subsidiary. His lawsuit then prompted an investigation by the state attorney general and the U.S. Attorney in Chicago, who later joined the whistle-blower suit. As the original whistleblower, Tyson could see a payout of 15 to 25 percent of the total judgment.

To learn more about the case:
- read this Modern Healthcare article (reg. req.)
- read this Chicago Tribune piece

Related Articles:
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Illinois doctors fight Medicaid HMO plan
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