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We did it all from scratch. Everything McWaters learned at Hospital Affiliates would prove useful in his next venture in when he helped psychiatrist Ronald I.

Dozoretz to found Options Mental Health, one of the first managed behavioral care companies in the country. McWaters became the chief executive officer of the Norfolk, Virginia-based company that developed customized mental health and substance abuse programs for federal, state, and local Medicaid populations.

As he explained to Managed Healthcare Executive, "It became clear to me that the Medicaid and uninsured populations were both very large and growing. It was still being managed by a s-era healthcare system.

Patients couldn't be seen, and doctors weren't getting paid enough. He struck out on his own in to start a new HMO dedicated to serving Medicaid recipients, primarily children and expectant mothers, literally working out the business plan on his kitchen table.

The approach McWaters took was similar to disease management, although the needs of the Medicaid population were not as constant. The HMO would concentrate on a few core disease states perinatal, asthma, diabetes, and sickle cell anemia , but the essential thrust was to provide education and guidance, for instance, steering patients to a primary care physician with whom they could develop a beneficial relationship rather than relying on a hospital emergency room for routine healthcare.

Moreover, Americaid would tackle other obstacles that stood in the way of patients receiving effective healthcare, relieving doctors of burdens normally shouldered by social workers, such as taking care of transportation and helping patients to find better housing.

While McWaters was targeting a high-maintenance population, it was one that offered a higher margin than the general population, as well as being more cooperative, because it was younger, responded well to treatment, and recovered more quickly. It was also a market neglected by major HMOs, presenting McWaters with a significant niche opportunity. He decided to house his new company in Virginia Beach, Virginia, despite having no desire to serve the Virginia market.

Rather, he chose the city because of its central location, quality of life, and educated workforce. McWaters then spent the next year applying for licenses in the states in which he wanted to operate, developing the products and necessary healthcare systems, and recruiting and training personnel. The first Americaid operation was launched in New Jersey in February By the end of the year the subsidiary enrolled 10, members. Americaid Illinois followed in April and signed up 2, members in Chicago.

Then in September Americaid Texas got started in Fort Worth and by the end of the year had 21, members. The company developed a consistent approach to entering a new market, starting out by inviting community leaders to focus groups and hiring some to serve as consultants to provide insights to the community and to act as outreach workers.

The company also sought out the people to whom Medicaid recipients were likely to turn for advice, educating clergy and area social service workers about how the Americaid plan worked. Because most states did not permit Americaid to market itself directly to Medicaid markets, the company placed information where potential members were likely to frequent, such as churches, Head Start programs, day-care centers, and supermarkets.

After the company achieved a toehold in the community it relied on word of mouth to build membership. Americaid won a bid to enroll Medicaid members in Fort Worth, Texas, signing up 2, by the end of the year. The company also began to branch out beyond the Medicaid population. According to federal law at least 25 percent of its membership had to be commercial enrollees. In addition, the company launched a Medicare HMO and another for "dual-eligibles," people covered by both Medicaid and Medicare.

Because of this product expansion, the company decided to change its name to something more inclusive, becoming Amerigroup Corporation.

Amerigroup enjoyed strong growth in , as membership topped the , mark, reaching , by the end of the year. Membership in Illinois doubled to 10, while the New Jersey plan grew from 10, to 38,, mostly the result of the company acquiring Oxford Health Plan's Medicaid business in the state.

The greatest increases, however, were achieved in Houston, when in the first full year of the plan's operation 40, members were enrolled. Nevertheless, it was an impressive showing for a young company and, more important, just a taste of what was in store for Amerigroup more than doubled in size in , the result of acquisitions as well as entering markets from scratch.

Amerigroup picked up 75, Medicaid recipients in Maryland and added another 8, by the end of the year. In the District of Columbia, Amerigroup acquired another 11, members and enrolled 1, over the next several months. Amerigroup also opened its Dallas Health Plan in July and by the end of the year signed up 34, members. Existing operations also saw gains: 10, in Fort Worth, 8, in New Jersey, and 10, in Illinois. To keep up with its rapid growth, Amerigroup also opened a new service center in Virginia Beach in , followed a year later by a technology center.

Amerigroup launched its Amerikids healthcare product in Dallas and Houston in as well as Ameriplus in New Jersey. During the year the company achieved significant increases in enrollment in all of its markets, adding 1, new members in the District of Columbia, 7, in Fort Worth, 8, in Dallas, 9, in Chicago, 11, in New Jersey, 12, in Maryland, and 17, in Houston.

The time seemed ripe for the company's initial investors to earn back their investments through a stock offering. To determine whether any other party or insurance carrier may have responsibility to pay for medical treatment, see our Accident Information Questionnaire. For general inquires, call our subrogation department at Call the number on the back of your membership card or call the corporate switchboard, Monday through Friday, at Find support and resources for health care providers or learn about career opportunities.

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