FOR IMMEDIATE RELEASE                                         CIV
TUESDAY, FEBRUARY 11, 1997                         (202) 616-2765
                                               TDD (202) 514-1888


     WASHINGTON, D.C. -- The operator of an Oklahoma psychiatric
hospital that allegedly treated children in an unsafe and harmful
environment then billed Medicaid for services will pay the United
States $750,000 to resolve allegations it defrauded the health
insurance program, the Department of Justice announced today.

     Assistant Attorney General Frank W. Hunger of the Civil
Division said the settlement with Community Psychiatric Centers
of Oklahoma Inc. (CPCO) resolves alleged billing fraud by the
company's psychiatric hospital, CPC Southwind, in Oklahoma City,
Oklahoma.  CPCO will pay the United States $750,000.

     "The Department will not tolerate the payment of health care
claims for the treatment of patients in substandard conditions,"
said Hunger.  "All health care facilities that participate in the
Medicaid program should know that the federal government expects
and demands that those facilities provide quality care in a safe

     The action, United States ex rel. Lisa Aranda and Gayle
DeWitt v. Community Psychiatric Centers of Oklahoma Inc. (Case
No. 94-608-A), was filed in 1994 in U.S. District Court in 
Oklahoma City under the qui tam provisions of the False Claims
Act, 31 U.S.C.  3730.  The United States intervened in the case
in April 1995. 

     The United States alleged in its complaint that CPC
Southwind, despite creating an unsafe and harmful environment for
children, nevertheless billed the Medicaid program for the care
of many of those children in violation of the False Claims Act.

     The complaint alleged that the hospital's staff frequently
notified the facility of the conditions, but the hospital
continued to admit the children and bill the federal government. 

     The hospital denied the allegations and filed a motion to
dismiss the case.  The federal district court in Oklahoma City
rejected the hospital's attempt to dismiss the complaint and held
that the allegations were actionable under the False Claims Act.

     The original action against CPCO was filed by Lisa Aranda,
who was a nurse at the hospital, and Gail DeWitt, who had several
children employed by the hospital, on behalf of themselves and
the United States.  These two individuals will receive a total of
$150,000 of the settlement as whistle-blowers under the qui tam
provisions of the False Claims Act.

     CPCO closed CPC Southwind last December.

     Community Psychiatric Centers Inc., the parent of CPCO, sold
its psychiatric hospitals in November 1996 and changed its name
to Transitional Hospitals Corporation.