Aug 14, 2008 1:43 pm US/Central
Amerigroup Settles Medicare Fraud Case For $225M
CHICAGO (Sun-Times Media Wire) ―
Amerigroup Corp. has agreed to end its appeal of a $334 million federal court judgment and pay $225 million to resolve claims it defrauded the Illinois Medicaid program by refusing to enroll pregnant women and other high-risk patients.
The settlement with Amerigroup, based in Virginia Beach, Va., replaces the federal court judgment, but remains the largest-ever award in a federal health care fraud case in Illinois, according to a release from the U.S. Attorney's office.
From 2000-04, Amerigroup was paid $243 million by the United States and Illinois to operate a Medicaid managed care plan in the state to provide health care to low-income people. It was required by law to enroll all eligible beneficiaries, including pregnant women, but the suit alleged it violated this requirement, and avoided enrolling unhealthy patients, as well as pregnant women, who were more costly to treat and would have eroded profit margins, the release said.
In October 2006, a federal jury found Amerigroup Corp. and Amerigroup Illinois liable for systematic and extensive fraud in the Medicaid program, the release said. The jury awarded the United States and Illinois $48 million in damages, which was automatically tripled by statute to $144 million. In March 2007, U.S. District Judge Harry Leinenweber imposed additional civil penalties of $10,500 on each of 18,130 false claims, for a total of more than $190 million, increasing total liability to more than $334 million.
Amerigroup filed an appeal in the 7th U.S. Circuit Court of Appeals, but as part of the settlement, agreed to dismiss its appeal and enter into a corporate integrity agreement. The settlement is not an admission of liability nor a concession by the plaintiffs, but states that the parties settled to avoid the delay, uncertainty and expense of further litigation.
The corporate integrity agreement requires Amerigroup to adopt a code of conduct, and policies and procedures to prevent improper discrimination. The agreement applies to managed care plans in all the states in which Amerigroup did business, currently 11. In addition, Amerigroup must hire an independent review organization to annually review its marketing practices and enrollment initiatives.
The suit was initially filed in 2002 by Cleveland Tyson, Amerigroup Illinois' former head of government relations. The United State and Illinois joined the suit in 2005. Under the federal False Claims Act and Illinois Whistleblower Reward and Protection Act, a private party can file suit alleging fraud against the state or federal governments and receive 15 to 25 percent of any recovery. As a result, Tyson will receive $56.25 million, the release said.
Amerigroup announced its intention to settle the case on July 22 and the 22-page settlement agreement was signed by all parties Wednesday.
(Source: Sun-Times Media Wire © Chicago Sun-Times 2009. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed.)
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