AMERIGROUP Reaches Agreement in Principle to Settle Illinois Qui Tam Litigation

VIRGINIA BEACH, Va., July 22 /PRNewswire-FirstCall/ -- AMERIGROUP
Corporation (NYSE: AGP) announced today that it has reached a comprehensive
settlement agreement in principle that will conclude its civil qui tam
litigation relating to certain marketing practices of the Company's former
Illinois health plan. The agreement in principle is subject to the completion
of definitive settlement documentation by the parties.
In 2007, the Court had entered a judgment against the Company and its
Illinois subsidiary of approximately $334 million, plus the fees of the
Relator's counsel. Under the terms of the proposed settlement, the Company
will pay $225 million to the United States and the State of Illinois, plus
approximately $9 million in legal fees, and will not admit any wrongdoing.
Additionally, in connection with the settlement, the Company will enter into a
Corporate Integrity Agreement with the Office of the Inspector General of the
U.S. Department of Health and Human Services.
"We are concluding this litigation now to remove a source of significant
legal and financial uncertainty for our organization. With this matter
resolved, we can concentrate fully on the business at hand -- meeting the
healthcare needs of our members and continuing to serve our government
partners," said James G. Carlson, AMERIGROUP Chairman and Chief Executive
Officer. "Our responsibility to our shareholders, associates, members,
providers and government partners is to close this chapter now and move toward
the future."
The Company will report a one-time charge for the settlement of
approximately $199 million net of the estimated tax benefit, in the second
quarter ended June 30, 2008. The Company will pay the settlement from
restricted funds previously established to cover costs related to the
judgment. Following the payment, which is expected to occur during the third
quarter of 2008, the Company's unrestricted cash balance will increase by
approximately $117 million due to the release of excess restricted funds.
These funds will be available for general corporate purposes. The Company will
also be favorably impacted by estimated tax benefits of approximately $35
million.
The Company will provide full-year 2008 earnings guidance in its
previously scheduled second quarter earnings release on Wednesday, July 23,
2008.
Unrelated to this case, AMERIGROUP Illinois voluntarily ended its contract
with Illinois in 2006 and no longer operates in that State. The Company also
has expanded its corporate compliance program significantly to fully ensure
compliance with state and federal regulations in its health plans.
About AMERIGROUP Corporation
AMERIGROUP Corporation, headquartered in Virginia Beach, Virginia,
improves healthcare access and quality for the financially vulnerable, seniors
and people with disabilities by developing innovative managed health services
for the public sector. Through its subsidiaries, AMERIGROUP Corporation
serves approximately 1.7 million people in Florida, Georgia, Maryland, New
Jersey, New Mexico, New York, Ohio, South Carolina, Tennessee, Texas and
Virginia. For more information, visit http://www.amerigroupcorp.com.
Forward-Looking Statements
This release is intended to be disclosure through methods reasonably
designed to provide broad, non-exclusionary distribution to the public in
compliance with the Securities and Exchange Commission's Fair Disclosure
Regulation. This release contains certain ''forward-looking'' statements
related to the proposed settlement of the qui tam litigation and the terms of
such settlement, if any, which are subject to numerous factors, many of which
are outside of our control. These statements are made pursuant to the Safe
Harbor provisions of the Private Securities Litigation Reform Act of 1995.
Forward-looking statements involve known and unknown risks and uncertainties
that may cause our actual results in future periods to differ materially from
those projected or contemplated in the forward-looking statements. We can give
no assurances that any forward-looking statements, including statements
regarding the completion of the definitive settlement documentation, the terms
of any final settlement, expected unrestricted cash balances or the tax
deductibility of the settlement payments, will, in fact, transpire, and,
therefore, caution investors not to place undue reliance on them. We
specifically disclaim any obligation to update or revise any forward-looking
statements, whether as a result of new information, future developments or
otherwise.
CONTACTS:
Investors: Julie Loftus Trudell
Senior Vice President, Investor Relations
AMERIGROUP Corporation
(757) 321-3597

News Media: Kent Jenkins Jr.
Senior Vice President, External Communications
AMERIGROUP Corporation
(757) 769-7859

SOURCE AMERIGROUP Corporation

Investors: Julie Loftus Trudell, Senior Vice President, Investor Relations,
+1-757-321-3597, or News Media: Kent Jenkins Jr., Senior Vice President,
External Communications, +1-757-769-7859, both of AMERIGROUP Corporation