Amerigroup Corp., plaintiffs ask for more time to reach settlement

VIRGINIA BEACH

Amerigroup Corp. and plaintiffs asked the U.S. Court of Appeals for the 7th Circuit for an additional 30 days to determine whether they can reach a settlement related to Amerigroup's appeal of a 2006 fraud verdict and its civil penalties, the Virginia Beach-based provider of managed care said in a regulatory filing.

In May, the appeals court in Chicago postponed oral arguments for the case. It ordered the parties, including the Justice Department, the state of Illinois and a former Amerigroup employee, to pursue mediation.

Amerigroup filed its appeal after a U.S. District Court jury determined in October 2006 that the company's Chicago-area health plan defrauded the Illinois Department of Public Aid and the federal government by discouraging the enrollment of pregnant women.

The jury awarded the plaintiffs damages of $48 million, which were tripled because of the nature of the case to $144 million. The court also imposed $190 million of civil penalties on Amerigroup.

In response to the appeals court's direction, the parties have met and reached agreement on many issues, Amerigroup said in a filing with the Securities and Exchange Commission this week.

"Some material issues remain the subject of disagreement," it said, adding that the parties "believe that further good faith efforts could resolve the outstanding issues."

Tom Shean, (757) 446-2379, tom.shean@pilotonline.com