Department of Justice Seal

FOR IMMEDIATE RELEASE                                         CIV
THURSDAY, SEPTEMBER 18, 1997                       (202) 616-2765
                                               TDD (202) 514-1888

                        FOR MEDICARE FRAUD

     WASHINGTON, D.C. -- Baptist Medical Center, a Kansas City,
Missouri hospital, will pay the United States $17.5 million to
settle allegations that it paid more than $1 million in kickbacks
to a local medical group in return for the group's referral of
Medicare-eligible patients, the Department of Justice announced

     Assistant Attorney General Frank W. Hunger of the Civil
Division and U.S. Attorney Jackie N. Williams of Kansas, said
Baptist Medical Center will pay the United States $17.5 million
to resolve claims that Baptist paid local physicians for
referrals of Medicare patients, and that the hospital received
referrals from physicians with whom it had financial

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

     The Department said that the agreement resolves claims that
Baptist submitted fraudulent Medicare claims for patients whose
referrals it received through various kickback schemes. 
Department attorneys claimed that Baptist entered into sham
consulting contracts with three osteopaths, Robert C. LaHue,
D.O.; Ronald H. LaHue, D.O.; and Robert C. LaHue, D.O., Chartered
d/b/a the Blue Valley Medical Group (collectively referred to as
"Blue Valley").  The agreement also settles claims that Baptist
violated the Stark I statute, by submitting clinical laboratory
claims for Medicare patients referred by Blue Valley, with which
the hospital had a financial relationship. 
     The Office of the Inspector General of the Department of
Health and Human Services and Baptist agreed separately to a
"Corporate Integrity Agreement" in which Baptist agreed to
undertake measures to ensure compliance with applicable laws and
Medicare rules and regulations in the future. 

     The case was conducted by the Civil Division and the U.S.
Attorney's Office in Kansas, with the assistance of the FBI and
the Health Care Financing Administration of the Department of
Health and Human Services.