An Illinois jury today entered judgment in favor of a Qui Tam whistleblower, Cleveland Taylor, against Amerigroup Illinois, Inc.today. The judgment of $48 Million following weeks of trial will be trebled under the Federal False Claims Act and the Illinois Whistleblower Reward & Protection Act. Mr. Taylor, a former Amerigroup employee, stands to gain a $21 Million to $36 Million dollar share of the verdict if it is upheld and collectible. Amerigroup has announced that it will appeal. Mr. Taylor supported by the Justice Department and the Illinois Attorney General, asserted that Amerigroup consciously discriminated against and discouraged pregnant women in their late pregnancies from signing up with Amerigroup, which makes its money by providing managed care to Medicaid recipients in Illinois and other states.
The State of Illinois reportedly paid Amerigroup approximately $243 Million Dollars from 2000 to 2003 of which Amerigroup paid out only $131 Million. The jury reviewed an email from a corporate executive encouraging his managers to "keep up the good work with the marketing representatives of not trying to sign up pregnant women." Mr. Tyson and friends asserted that it was the policy of the company to have the marketing representatives not sign up pregnant women and to avoid signing people from high drug use areas. Amerigroup asserts that it only did what the state agency wanted it to do and did it with their full knowledge and consent. It also asserted that its numbers of pregnant women had fallen because they were unwilling to leave their current providers.
The case, U.S. ex. rel. Tyson v. Amerigroup Illinois, Inc. No. 02-C-6074 (N.D. Ill, E. Div.)raises new and novel issues of damages and fraud, which Amerigroup will seek to exploit on appeal. The Court ruled that each enrollment form constituted a claim for payment. Managed care companies are supposed to make their money, buy covering and limiting the delivery of services. How they accomplish the delecate balance between the two raises interesting questions of proof. The unfortunate fact is that many managed care companies generally compete by enrolling the "healthies" rather than keeping a representative population healthy.
The Plaintiffs asserted that there were 18,130 false claims with an entitled statutory recovery of $5500 to $10,000.00 per false claim. Even more concerning to Amerigroup has to be the possibility of exclusion from participation in other federally financed programs as a result of the verdict. Although Amerigroup has left Illinois it still provides services for 1.2 million enrollees in other states. This could be one of those "bet the farm" cases. Amerigroup is a publicly traded company that only recently rebounded (NYSE:AGP:$31.13) from a 2005 dip of its share price to $15.45 as result of investor concerns over its prior losses related to unexpected medical costs and the cost of care of newborns.
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