VIRGINIA BEACH
Three weeks after Amerigroup Corp. disclosed that its earnings had been hurt by higher-than-expected nursing expenses in Tennessee, it announced Thursday that its health-care plan in that state will receive a retroactive rate increase for the April-through-June quarter.
The increase was part of a contract renewal that includes higher rates through June 2009, said the Virginia Beach-based health insurer.
Amerigroup, which specializes in managed care for beneficiaries of Medicaid and other government-funded programs, said it also will receive a one-time payment related to the cost of nursing services provided from April 2007 through March.
On June 10, Amerigroup suspended its guidance for 2008 earnings, citing higher-than-expected nursing costs in its Tennessee plan. Its share price plunged in heavy trading after securities analysts cut their estimates of the company's 2008 earnings.
Amerigroup entered the middle Tennessee region in April 2007 as part of the state's restructuring of its once-troubled Medicaid program. The company currently has 355,000 members in its Tennessee plan.
On Thursday, the company said it will discuss the rate increases in greater detail and provide guidance for its full-year earnings when it reports results for the April-through-June quarter on July 23.
Amerigroup's share price rose $1.22, or nearly 6 percent, on Thursday to close at $21.82.
Tom Shean, (757) 446-2379, tom.shean@pilotonline.com
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