former vice-president of US health insurer Amerigroup, has been
amply rewarded: to the tune of $56.25 million.
The sum is his share of $225 million which Amerigroup has agreed to
pay as a settlement to resolve claims its Illinois subsidiary
defrauded the Illinois Medicaid programme, in a case brought by the
United States government and the State of Illinois.
Specifically, the settlement resolves allegations that Amerigroup
and its Illinois unit systematically avoided enrolling pregnant
women and unhealthy patients in their managed care programme in
Illinois, as they were more costly to treat and would have eroded
Amerigroup’s profit margin.
Amerigroup was paid by the US and the state to operate a
Medicaid-managed care health plan in Illinois to provide health
care to low-income people.
Tyson’s reward is in terms of the federal False Claims Act and the
Illinois Whistleblower Reward and Protection Act that entitles a
private party, known as a relator, to file suit alleging fraud on
behalf of the federal or state government and receive a share of
Amerigroup will also pay his $9 million legal fees accumulated
As part of the settlement, Amerigroup will not have to admit
wrongdoing. However, it has been required to enter into a corporate
integrity agreement with the Office of the Inspector General for
the US Department of Health and Human Services.
According to the Department of Justice, the integrity agreement
requires Amerigroup to adopt policies and procedures and a code of
conduct designed to prevent improper discrimination against federal
health care programme beneficiaries in its marketing and enrolment
practices. The integrity agreement also applies to Amerigroup’s
managed care plans in all 11 states in which it does
In addition, Amerigroup must hire an independent organisation to
annually review its marketing practices and enrollment
The insurer’s board of directors must certify the effectiveness of
its compliance programme each year.
In 2007 Amerigroup, which has 1.7 million members of its health
plans, reported total revenue of $3.9 billion and a net profit of