Rates increased for TennCare contractor, contract extended

Virginia company gets much-needed (as far as its profits are concerned) increase in premiums from state

Email | Print By Walker Duncan

It looks like Tennessee might become less of a rough spot for Virginia Beach-based AmeriGroup Corp. Late last week, the TennCare contractor received both a contract extension with the state and a rate hike, part of which is retroactive.

Last month, AmeriGroup's stock (Ticker: AGP) took a shellacking after multiple analysts lowered earnings expectations when the company warned of higher than expected expenditures in the home health and private-duty nursing areas in Tennessee along with lagging rate negotiations with the state.

Now, as part of the new agreement, which runs through June of 2009, the company will receive a rate increase going back to April 1 of this year as well as a one-time payment adjusting for services provided between April of ’07 and March of this year.