Amerigroup reaches settlement of Illinois qui tam litigation

August 21, 2008  |  Press Releases

Healthcare company Amerigroup Corp. (AGP) has announced a settlement agreement to conclude its civil qui tam litigation arising out of the provider’s fraudulent Medicaid practices in Illinois. The company will pay a substantial award to the U.S. and the State of Illinois, including a hefty bill for legal fees. The company will also enter into a corporate integrity agreement with the U.S. Department of Health and Human Services, the federal agency that provides partial funding for state Medicaid programs. Such agreements sometimes require a health-care provider to retain a compliance officer, develop written standards and policies, and implement a comprehensive employee training program. Amerigroup will not admit any wrongdoing.

Amerigroup provides managed care for beneficiaries of Medicaid in ten states. A former Amerigroup employee cried foul on the provider’s practice in Illinois of discouraging pregnant women and individuals with special needs from enrolling in the plan. The employee-whistle blower, the state of Illinois and the federal government filed suit against Amerigroup, charging that the company defrauded state and federal agencies by such practices. A federal jury awarded the plaintiffs damages, which amount was tripled in accordance with state and federal “whistle blower” statutes. The trial court imposed additional fraud-related penalties. In 2007, the court ordered Amerigroup to pay damages in the nine figures, plus the plaintiffs’ attorneys’ fees. Amerigroup appealed the judgment to the U.S. Court of Appeals for the 7th Circuit and posted a bond. The settlement was reached while the appeal was pending.

Amerigroup has also announced that, unrelated to the case, it has voluntarily ended its 2006 contract with Illinois and no longer operates there.

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