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Amerigroup Fined $48M for Discrimination October 31, 2006

Posted by C.A.R.D in Card, Citizens Against Racism and Discrimination, Discriminate, Discrimination, jury.
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Insurance company Amerigroup Corp. and its Illinois affiliate were held liable Monday for what lawyers said ultimately would total $144 million in damages for discriminating against pregnant women.

A federal court jury returned a verdict against the company that specializes in health care for low-income patients calling for $48 million in damages – an amount lawyers said would be tripled under state and federal laws.

Besides the damages, the 12-year-old Virginia Beach, Va., company that had revenue of $2.3 billion in 2005 could be socked with additional penalties reaching well into the millions, government attorneys said.

Federal and state prosecutors as well as a whistleblower said that while marketing its services in Illinois, Amerigroup avoided pregnant women and others likely to run up high doctor bills.

That cheated the government, which was subsidizing the company to market its services evenly among all low-income patients regardless of whether they were pregnant or had costly illnesses, the attorneys said.

State Attorney General Lisa Madigan said the sizable verdict sent “a strong message that companies who contract with the State of Illinois to provide health care to its neediest residents cannot discriminate against those residents who need care the most.”

She called the company’s alleged discrimination “unconscionable.”


Attorneys for the company denied there was any fraud involved, saying Amerigroup had publicly stated it was trying to reduce the number of third-trimester women signed up to ensure “continuity of care.”

They said state officials even had urged the company to do so.

“We would respectfully but very strongly disagree with the jury’s verdict and we will appeal,” company spokesman Kent Jenkins Jr. said.

“We think there were errors that led the jury to consider information that was inaccurate, incomplete and misleading,” Jenkins told reporters.

Jurors saw a videotape in which one executive said he always sought out “the healthies” when signing up patients for the HMO. Jurors also saw a number of e-mails in which company officials spoke positively about limiting the number of pregnant women enrolled.
The suit was based on a whistleblower complaint from Cleveland Tyson, a former lobbyist for Amerigroup’s Illinois affiliate. Tyson, who was fired in 2002, had lobbied state lawmakers and regulators.

Tyson’s attorneys said it was “unclear” why he was fired and Jenkins said it would be improper for the company to comment on personnel matters.

The basic damages awarded by the jury were $48 million. Attorneys said that as a matter of law U.S. District Judge Harry D. Leinenweber would be required to triple the damages to $144 million.

They said the tripling is required under both the federal False Claims Act and the Illinois Whistleblower Act.

The jury also found that between April 2000 and July 2003 Amerigroup made 18,130 false claims against Medicaid – a state administered program for low-income patients that is subsidized by the federal government.

Leinenweber could charge the company as much as $11,000 for each of those instances of alleged fraud. He said he would decide that later.

Also to be decided later is how big a share of the money Tyson will receive. Whistleblowers are rewarded under the law with a portion of the damages awarded by a jury.

Tyson attorney David J. Chizewer declined to comment on how much the former lobbyist might collect for blowing the whistle on the company.

Amerigroup no longer has operations in Illinois. Jenkins said the decision to leave, which was made in August, had nothing to do with the case. It does have operations in eight other states and the District of Columbia and plans to expand into Tennessee next year, Jenkins said.

Source: Forbes

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