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May 1, 2008updated 13 Apr 2017 9:01am

Reward day for whistleblower

Honesty displayed by Cleveland Tyson, a 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 Amerigroups profit margin.

By LII editorial

Honesty displayed by Cleveland Tyson, a 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 any recovery.

Amerigroup will also pay his $9 million legal fees accumulated since 2002.

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 business.

In addition, Amerigroup must hire an independent organisation to annually review its marketing practices and enrollment initiatives.

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 $116.5 million.

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