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Carrier Settles Medicaid Claims

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A company has agreed to pay $225 million to resolve allegations that it avoided enrolling sick patients and pregnant women in an Illinois Medicaid program it administered, officials say.

Officials at the U.S. Department of Justice and the Illinois attorney general’s office say they investigated the company, AmeriGroup Corp., Virginia Beach, Va., because the company was required by law to enroll all eligible beneficiaries.

AmeriGroup, which shut down Illinois operations in 2006, has admitted no wrongdoing in connection with the settlement and says it agreed to the settlement to remove a source of legal and financial uncertainty.

The company announced the completion of a preliminary settlement agreement in June.

The company recorded a $199 million charge in connection with the settlement in its second-quarter financial statements.

The former AmeriGroup employee whose complaint triggered the investigations, Cleveland Tyson, will receive a $56 million share of the settlement payment, officials say.