Illinois Atty. Gen. Lisa Madigan’s office recently intervened in a whistleblower’s suit that accuses an Illinois HMO of defrauding the Medicaid health insurance program for the poor by submitting false claims to the government.
The case centers on a former employee’s allegations that Amerigroup Corp.’s Amerigroup Illinois Inc. subsidiary “cherry-picked” certain Medicaid patients over others as a way to make more money for the Virginia Beach, Va.-based firm. Madigan’s office confirmed it intervened in the federal civil case in late March.
The case is scheduled for a June 20 trial in U.S. District Court in Chicago. As a whistleblower case, it was filed under seal three years ago but became unsealed in 2003.
Amerigroup is fighting an effort by Madigan’s office to gain access to various documents that include the HMO’s marketing and “rate-setting practices,” according to a filing state prosecutors made last week in Cook County Circuit Court seeking enforcement of an investigative subpoena.
State prosecutors allege Amerigroup “purposely excluded pregnant women and others with serious illnesses from participating in their HMO in violation of state and federal law,” state prosecutors said.
The state prosecutors’ interest in the case is a bit unusual, legal observers and the defendants’ attorneys say, because federal authorities have decided not to intervene.
Attorneys for Amerigroup say the apparent lack of interest by federal prosecutors adds weight to their argument that whistleblower and former employee Cleveland Tyson’s allegations have no merit.
“The fact that the federal government has said it is not interested in intervening in a False Claims Act case makes a strong statement that the case . . . doesn’t have any merit,” said Dan Voelker, a Chicago attorney representing Amerigroup. “Amerigroup is regulated by [the Illinois Department of Public Aid] and has complied with all of its obligations.”
Legal observers familiar with whistleblower suits say there are increasing examples of states intervening in such cases without the federal government, especially if they have a particular policy interest. In this case, Madigan’s office alleges that a state taxpayer-supported entity, the Department of Public Aid, paid “$45 million more than it should have.”
“The state money and the state interest is different in part due to dollars and policies, so that the United States can choose not to intervene when the state can,” said Robin Potter, a Chicago attorney who has represented whistleblowers in health-care fraud cases. The Medicaid program is jointly funded by the federal government and the state in which it operates.
Voelker said Amerigroup is fighting the subpoena because the information Madigan’s office is requesting has already been provided to Tyson’s attorneys as part of the overall case.
Amerigroup is one of the largest Medicaid HMOs in Illinois, with 37,000 health plan members, most of them in Chicago. Its parent company has more than 1 million health plan enrollees in six states and the District of Columbia.
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Only 153,000 patients, or fewer than 10 percent of the state’s Medicaid population, are enrolled in HMOs in Illinois.
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