In late July, the insurance company Amerigroup Corporation agreed to settle a lawsuit for $234 million. This all began with a whistleblower lawsuit initiated by one Cleveland Tyson, who had been Amerigroup’s vice president of government relations. The federal government joined this lawsuit. The settlement amount is decided upon, but no papers are signed yet.

Amerigroup had a contract with the Illinois Department of Public Aid (IDPA) and were supposed to provide health care to people on Medicaid. In 2007, a Chicago federal judge ordered Amerigroup to pay $334 million plus legal fees after the jury decided that Amerigroup had avoided enrolling people with expensive health problems, and pregnant women in their third trimester. At the same time, Amerigroup was accepting IDPA payments from the government based on the company providing health care to all Medicaid enrollees.

This was insurance fraud. The jury verdict was awarded under the False Claims Act and the Illinois Whistleblower Reward and Protection Act, and is the largest such verdict ever awarded.

Amerigroup appealed this verdict and after the case went before the 7th U.S. Circuit Court of Appeals in Chicago, settlement talks began, leading to the reduced settlement amount of $234 million. Of that amount, $225 million will be paid to the federal government and the state of Illinois, and $9 million will go for legal fees. The whistleblower is entitled to receive something between 15 percent and 25 percent, according to federal whistleblower law.

Insurance fraud can affect anybody in the U.S. If you have been unfairly denied coverage, or denied claim payment, and are wondering what to do about it, please call or email our office. We will be glad to give you a free case evaluation.