Amerigroup Must Pay At Least $144M After Jury Found HMO Systematically Avoided Enrolling Pregnant Women

By: Litigation News

A federal jury in Chicago on Monday ordered Virginia-based health insurer Amerigroup, which had operated Medicaid managed care plans in Illinois, to pay $48 million in damages -- an amount that will triple to $144 million under the federal False Claims Act -- for discrimination against pregnant women and other beneficiaries with health issues, the Chicago Tribune reports (Bush, Chicago Tribune, 10/31). The company through its subsidiary Amerigroup Illinois from 1996 through 2005 received about $250 million in Medicaid funds, which were to be used to provide health care to low-income residents. In 2002, Cleveland Tyson, the company's former vice president of government relations, filed a whistleblower lawsuit against the company for allegedly choosing to provide health care coverage to healthy individuals and discriminating against pregnant women in their third trimester and seriously ill people to avoid paying for expensive health care services. David Adams, an attorney representing State Attorney General Lisa Madigan's (D) office, said in his opening statement that while the company took in about $250 million in Medicaid funds, it paid out $131 million for patient health care costs. Dan Voelker, an attorney for Amerigroup, said the company did seek to reduce the enrollment of pregnant women in their third trimester, but officials from the Illinois Department of Healthcare and Family Services -- which regulated Medicaid funds to Amerigroup -- were aware of the practice. He added that the company avoided covering pregnant women in their third trimesters because they were concerned the women would switch physicians (Kaiser Daily Women's Health Policy Report, 10/6). After two days of deliberations, the jury ruled that Amerigroup and subsidiary Amerigroup Illinois sought to increase profits by excluding beneficiaries with health issues from Medicaid managed care plans. Tyson will receive between $21 million and $36 million of the damage award, the Tribune reports.

Reaction
Illinois Attorney General Lisa Madigan (D) said, "The verdict will both reimburse the state of Illinois for the money Amerigroup obtained illegally and punish Amerigroup for their unconscionable conduct." Madigan added, "The evidence unequivocally established that Amerigroup intentionally turned its back on pregnant women and people suffering from serious medical conditions." Amerigroup spokesperson Kent Jenkins said that the company will appeal the verdict. Jenkins said, "We think that during the course of the trial there were errors that led the jury to consider information that was inaccurate, incomplete and misleading" (Chicago Tribune, 10/31).

You can view the entire Kaiser Daily Health Policy Report, search the archives, or sign up for email delivery at http://www.kaisernetwork.org/dailyreports/healthpolicy. The Kaiser Daily Health Policy Report is published for kaisernetwork.org, a free service of The Henry J. Kaiser Family Foundation . © 2005 Advisory Board Company and Kaiser Family Foundation. All rights reserved.

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