Amerigroup Corp., which manages government health plans for the poor, must pay at least $144 million in damages for wrongfully denying coverage to pregnant women eligible for Medicaid. The jury awarded the plaintiffs, which included the federal and Illinois governments and a former employee, a total of $48 million. Under the applicable federal law, that amount will be tripled. The company may also be liable for a total of as much as $199 million in penalties for more than 18,000 instances of fraud found by the federal court jury in Chicago. The bottom line is that Amerigroup was getting paid for serving people they weren’t in fact serving. That surely sounds like corporate fraud to me.

Amerigroup contracted with the state of Illinois to provide services to Medicaid patients. After he was fired, Cleveland Tyson — who was in charge of government relations for the company in Illinois — filed suit four years ago. The former employee accused the company, which has operations in nine states and the District of Columbia, of maximizing its profit by keeping pregnant women and others with expensive medical conditions off its rolls. The case was filed under the federal False Claims Act and a parallel state law. This is an example of how this law allows the government to protect taxpayers and punish corporations that commit fraud against the government.

Source: Bloomberg