Amerigroup Settles with Medicaid for $225 Million

Amerigroup Settles with Medicaid for $225 Million

Amerigroup has agreed to pay $225 million to settle allegations by federal and Illinois state authorities that Amerigroup's health plans denied coverage to pregnant women and people with health ailments in the Illinois Medicaid program.

A whistle-blower lawsuit was filed in 2002 by former vice president of government relations at Amerigroup's Illinois subsidiary, Cleveland Tyson, that claimed the company cherry-picked the healthiest patients to reduce spending. In March 2007, a federal judge in Chicago ruled against Amerigroup and awarded $334 million in the lawsuit.

Amerigroup, which first announced the proposed $225 million settlement agreement in July, said that it also will pay $9 million in legal fees in the settlement, and the company has agreed to enter into a corporate integrity agreement as part of the settlement. DOJ also said that the insurer's appeal of the $334 million court judgment will be dismissed as part of the settlement.

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Published on Aug-15-08