Jury finds HMO bias in signing patients
Amerigroup shunned pregnant women, high-risk patients
By Rudolph Bush
Chicago Tribune
October 31, 2006
A health maintenance organization hired by the government to provide coverage for the poor in Illinois will have to pay damages of $144 million for discriminating against pregnant women and other potentially high-risk patients, a federal jury in Chicago decided Monday.
After two days of deliberations, the jury found that Amerigroup Corp. and subsidiary Amerigroup Illinois sought to fatten their profits off Medicaid dollars paid into their plans by signing up healthy clients and intentionally avoiding those who had health issues.
Amerigroup, which no longer operates in Illinois, runs managed-care plans that, because of restrictions on doctor and hospital choices to their networks, are a cheaper alternative to fee-for-service Medicaid.
Prosecutors said they also will seek almost $200 million more in penalties from the Virginia Beach, Va.-based company because it filed more than 18,000 false claims with the state.
Amerigroup trained its marketing representatives to avoid people who faced high medical bills and had a policy of “cherry-picking” healthy clients, according to testimony and documents presented during the month-long trial.
Under the Medicaid compensation system, the company pocketed more money if it paid out less in medical bills.
A series of e-mails and statements from Amerigroup executives were key elements of the plaintiffs’ case.
In a 2001 e-mail shown to the jury, Amerigroup Illinois’ director of medical management told managers, “Please keep up the good work with the marketing reps of not trying to sign up pregnant women.”
In another e-mail, the executive said the company had continued to build experience in not signing up pregnant women or people from areas where drug abuse was prevalent.
Another Amerigroup executive said in a sworn statement that it was always his policy “to go after the healthies,” prosecutors said.
Dwight Jones, Amerigroup’s corporate representative at the trial, acknowledged on the stand that a large drop in the number of pregnant women the company had as clients was due to an active effort to avoid signing them up in the first place, Cohen said.
http://www.chicagotribune.com/features/health/chi-0610310171oct31,1,5680823.story
Comment:
By Don McCanne, M.D.
Amerigroup has provided us with a prime example of why the single payer reform model is not only publicly funded but also publicly administered. Contracting to private intermediaries, such as Medicaid HMOs or Medicare Advantage plans, is an open invitation for the plans to manipulate the system to achieve their primary goal of enhancing profits.
The boards and management of these entities are absolutely obligated to place the interests of their investors above all else. Non-profits are obligated to use similar devious methods in order to compete successfully with the for-profits in the insurance marketplace.
Think of why we need to establish a single, equitably funded, universal risk pool. That’s easy. Now think of any reason to place a business model intermediary between that pool and the health care that patients receive.
Talk about drawing a blank.