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

Main Category: Litigation / Medical Malpractice
Also Included In: Health Insurance / Medical Insurance;  Pregnancy / Obstetrics
Article Date: 03 Nov 2006 - 11:00 PDT

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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. 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. The case involved a federal whistleblower lawsuit filed by Cleveland Tyson, an Amerigroup official fired in 2002 who will receive between $21 million and $36 million of the damage award. According to prosecutors, from 2000 to 2003, Amerigroup received $243 million in Medicaid reimbursements and misinformed the state that company Medicaid managed care plans enrolled eligible beneficiaries without consideration of their health status. Prosecutors also said that Amerigroup trained marketing representatives to avoid Medicaid beneficiaries with high medical bills and had a policy of "cherry picking" beneficiaries without health issues. Prosecutors submitted a number of e-mails and statements from Amerigroup officials as evidence in the case. In a 2001 e-mail, the director of medical management for Amerigroup Illinois wrote to company managers, "Please keep up the good work with the marketing reps of not trying to sign up pregnant women." Attorneys for Amerigroup, which withdrew operations from Illinois in August, argued that the company had not discriminated against pregnant women or other Medicaid beneficiaries with health issues and never misinformed the state about company marketing practices.

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Illinois Attorney General Lisa Madigan 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" (Bush, Chicago Tribune, 10/31). In the event that Amerigroup loses the appeal, the "the financial impact could be material" because the $144 million damage award represents 94% of the total unregulated cash held by the company as of the third quarter, according to Deutsche Bank. Goldman Sachs said that the verdict represents about 8% of the Amerigroup market capitalization but likely will not affect company operating earnings (Wisenberg Brin, AP/Houston Chronicle, 10/31).

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