Amerigroup's $225M fine may not benefit providers

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Last week, Medicaid health plan Amerigroup agreed to pay $225 million to settle charges that it excluded pregnant women and sick members to avoid paying their bills. Among the victims of Amerigroup's alleged bad conduct were providers, who ended up not getting even the pittance that Medicaid would otherwise have provided to them. In theory, it would be great if hospitals and physicians were given some of the proceeds of the settlement, as they probably suffered significant losses. However, as things stand, it doesn't seem that this will happen.

While $56.25 million of the fund has been set aside for Cleveland Tyson, a former company executive who gets the money as his reward for serving as a whistleblower, the U.S. Department of Justice and Illinois Attorney General's office will split the remainder of the funds. The state will provide some of the money to the state police and AG's office, both of which will get about $16.6 million, and pass on $67 million to the general revenue fund, although none has been earmarked for providers.

It's not as though such funds aren't needed, however. Illinois hospitals, for example, averaged roughly $1 billion per year in bad debt expense over the last several years, and provided around $400 million worth of charity care, according to a spokesperson for the Illinois Hospital Association.

To find out more about this settlement's(lack of) impact on providers:
- read this InsideARM piece

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