In a press release issued on August 14, 2008, the Justice Department and the Attorney General of Illinois gave details of a $56 Million dollar award paid to Medicaid/Medicare fraud whistleblower out of $225 million payment the groups received from Amerigroup Corporation. 

The payment resolves claims that the Virginia Beach, Virginia company and its Illinois subsidiary committed Medicaid fraud against the Medicaid program run by the state of Illinois. Amerigroup runs managed health care plans in 11 states.

The fraud allegations centered on the company’s refusal to enroll some pregnant women and unhealthy patients in the managed care program it administered in Illinois. Amerigroup received payments from both the United States and the state of Illinois. Its agreement with both entities required it to enroll needy patients, including pregnant women and unhealthy patients. Its refusal to do so prompted the government’s actions.

Presumably, the company’s denying enrolment to these two classes of patients would increase its profitability.

Whistleblower receives over $56 Million for reporting Medicare/Medicaid fraud under the False Claims Act

A whistleblower, Raymond Tyson, a former Amerigroup employee, started the chain of events leading to the settlement when he filed a lawsuit under the federal False Claims Act, alleging the non-enrolment activities of his employer. The Act has been effective in enlisting citizen involvement to report Medicaid fraud in the workplace. It provides for whistleblowers to share in monies recovered. As a result of this settlement, Tyson will receive over $26 million.

The government takes Medicaid fraud seriously. "This settlement should send a clear message that the state of Illinois will not tolerate illegal conduct in the provision of healthcare for Illinoisans," said Illinois Attorney General Lisa Madigan. "I am pleased that our work on this case will bring millions of dollars to the State of Illinois." In an attempt to prevent the company from further such activities, the settlement further requires it to enter into a Corporate Integrity Agreement with the Inspector General for the U.S. Department of Health and Human Services.

That agreement will cover Amerigroup’s managed health care activities in all 11 states in which it operates, not just Illinois. It requires the adoption of procedures and a code of conduct designed to prevent any fraudulent discrimination against Medicaid beneficiaries.

Have information on Medicaid Fraud?

If you have information about Medicaid fraud, you may be eligible to receive significant compensation. Contact the Medicaid Fraud Reporting Center for a confidential claim evaluation today. You may report Medicaid fraud by completing the form on this page, or by calling our Medicaid Fraud Hotline at 1-800-934-2921.