Amerigroup Corporation Settles Healthcare Fraud Case for $225M

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Jeffrey Johnson is a legal writer with a focus on personal injury. He has worked on personal injury and sovereign immunity litigation in addition to experience in family, estate, and criminal law. He earned a J.D. from the University of Baltimore and has worked in legal offices and non-profits in Maryland, Texas, and North Carolina. He has also earned an MFA in screenwriting from Chapman Univer...

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Written by Jeffrey Johnson
Insurance Lawyer Jeffrey Johnson

UPDATED: Jul 16, 2021

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The Amerigroup Corporation recently settled claims alleging that it defrauded Illinois’s Medicaid program by not enrolling pregnant women and unhealthy patients in the state’s low income program – something it was required to do. An Amerigroup employee was the first to bring a lawsuit against the company which ended up costing it $225 million.

Profits over patients

Amerigroup Corporation, the Virginia based healthcare company that provides services to those who are financially vulnerable, seniors and people with disabilities through publicly-funded programs, was supposed to enroll low income clients who were unhealthy or pregnant in the Illinois Medicaid program. According to news reports, the company did exactly the opposite by discriminating against those who were eligible for Medicaid benefits. It chose not to enroll them in an effort to increase its profits, but ended up settling the matter for $225 million, plus an additional nine million dollars in legal fees.

The Amerigroup employee who first brought the lawsuit did so because he felt that the company was putting profits over patients. While the company said that it would not admit any wrongdoing in the settlement, it did agree to enter into a corporate integrity agreement with the U.S. Health and Human Services Department in which the company is required to follow a code of conduct to prevent discrimination in its enrollment and marketing practices in the future.

Whistleblower Will Get $56M

The employee who discovered the fraud and initiated the lawsuit will get 25% of the settlement amount, or approximately $56 million. Under a whistleblower, or Qui Tam, lawsuit, the whistleblower can file a lawsuit against a company for fraud on behalf of the government. The government has the option to join the lawsuit, not join the lawsuit, settle it or have it dismissed.

In this case, the government did join the lawsuit and the whistleblower collected 25%. Other whistleblowers have recovered even higher percentages and most tend to receive hefty sums as these types of cases usually deal with very high recovery amounts.

If you’ve encountered fraudulent activity against the government in your job, contact an attorney whose practice focuses in this area of the law to discuss your situation. Consultations are free, without obligation and are strictly confidential. To contact an experienced attorney, please click here.

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