FOR IMMEDIATE RELEASE                                         CIV
TUESDAY, FEBRUARY 4, 1997                          (202) 616-2765
                                               TDD (202) 514-1888


     WASHINGTON, D.C. -- One of the nation's largest suppliers of
durable medical equipment and three health care providers will
pay the United States more than $2 million to settle allegations
they sought to defraud the Medicare program through sham
contracts and kickbacks, the Department of Justice announced

     Assistant Attorney General Frank W. Hunger of the Civil
Division and U.S. Attorney Kent B. Alexander of Atlanta, Georgia,
said Apria Healthcare Group Inc. will pay the United States
$1,650,000 and Georgia Lung Associates, a group of four
physicians practicing in Austell, Georgia, will pay $346,000. 
Paso del Norte Health Foundation of El Paso, Texas (f/k/a
Providence Memorial Hospital), and Physicians Pharmacy Inc. of
Georgia will pay $24,000.

     "We want all health care providers who participate in the
Medicare program to understand clearly that the Inspector
General's Office of the Department of Health and Human Services
and the Department of Justice will investigate and prosecute
those who try to defraud this vital program for America's
elderly," said Hunger.

     HHS Inspector General June Gibbs Brown said, "Health care
fraud continues to be the major priority of our offices.  It is
particularly important in this era of health care change for the
government to hold businesses strictly accountable for any
misconduct while providing services to Medicare patients."

     Alexander said, "We cannot and will not tolerate any abuses
in the Medicare program.  One of the highest priorities we have
is to maintain the integrity of this program through vigorous
enforcement of the law." 

     The Department said Apria, an oxygen supplier, submitted
false Medicare claims for patients whose referrals it received
through a kickback scheme it operated in Georgia and Florida. 
The United States alleged that Apria entered into sham consulting
contracts with Georgia Lung and other physicians in order to
induce referrals.  George Lung, for example, referred Medicare
patients to Apria for oxygen supplies.  The agreement settles
claims that Apria and Georgia Lung defrauded Medicare by billing
for patients referred pursuant to the kickback scheme.  

     The agreement with Paso de Norte settles allegations made by
a private whistleblower that it provided referrals to Apria in
exchange for compensation, while Physicians Pharmacy's settlement
resolves allegations by the same whistleblower that it received
referrals from GLA based on a financial interest held by a GLA
physician, the Department said. 
     Brown said the Office of the Inspector General of HHS and
Apria agreed separately to a "Corporate Integrity Agreement" in
which Apria agreed to undertake measures to ensure compliance
with applicable laws and Medicare rules and regulations in the
future.  The agreement requires, for example, that Apria
establish a confidential disclosure program enabling employees to
report any inappropriate practices or billing procedures.

     The agreement settles a dispute originally brought as a qui
tam case in the United States District Court in Atlanta in United
States ex rel. Parker v. Apria, Civil Action No. 1:95-cv-2142-FMH.
As part of the settlement, Mark Parker, who filed the suit
on behalf of the United States, will receive approximately
$454,839 of the recoveries.

     The case was conducted jointly by the Civil Division and the
U.S. Attorney's office in Atlanta with the assistance of HHS'
Offices of Inspector General in Washington, D.C., and Atlanta,
and the Atlanta office of the FBI.