FOR IMMEDIATE RELEASE                                         CIV
FRIDAY, OCTOBER 18,1996                            (202) 616-2765
                                               TDD (202) 514-1888

                U.S. RECOVERS $255 MILLION FOR 
        MEDICARE RIP-OFF BY FIRST AMERICAN HEALTH CARE 

     A bankrupt home health care organization and its purchaser
will reimburse the federal government $255 million for overbilled
and fraudulent Medicare claims submitted by the company, under an
agreement announced today by the U.S. Department of Justice and
U.S. Department of Health and Human Services.
 
     Under the agreement, First American Health Care of Georgia,
Inc., the nation's largest home health provider, and its new
owner, Integrated Health Services, Inc, will reimburse the United
States money that Medicare allegedly overpaid the company and
money the company allegedly fraudulently billed Medicare.
 
     "We will not tolerate the misuse of our nation's precious
health care dollars," said Attorney General Janet Reno.  "This
settlement reflects the government's determination to recover
every dollar owed Medicare, and to crack down on perpetrators of
health care fraud with all the resources available to us."

     "This is an excellent example of how Federal agencies can
come together to protect beneficiaries and prosecute health care
providers who submit fraudulent Medicare claims," said Secretary 
of Health and Human Services Donna Shalala.  "The Clinton
Administration has zero tolerance for waste, fraud and abuse.  We
are committed to identifying fraud and abuse, and returning money
from all inappropriately paid claims to Medicare."

     The agreement settles allegations that First American billed
Medicare for costs unrelated to the care of patients in their
homes, including personal expenses of First American's senior
management, marketing and lobbying expenses.  In a related
criminal action, the company's two major principals, Jack and
Margie Mills, were found guilty of defrauding Medicare, and are
currently serving prison terms of 90 months and 32 months
respectively for their involvement in the scheme.

     First American provided care to approximately 30,000
patients a day, about 94 percent of them Medicare beneficiaries. 
The company, which operated approximately 425 locations in more
than 30 states, filed for bankruptcy protection earlier this year
in Georgia.  Under a plan of reorganization, First American
merged with IHS, which has agreed to pay the government the
settlement amount on First American's behalf.
      
     The agreement was the result of a cooperative, multi-agency
effort by the United States Attorney for the Northern District of
Georgia, the United States Attorney for the Southern District of
Georgia, the Civil Division of the Department of Justice, along
with the Health Care Financing Administration (HCFA) and the
Department of Health and Human Services' Office of Inspector
General.  As a result of the Inspector General's investigation of
First American's activities, administrative action was taken
against the company and Jack and Margie Mills were excluded from
further participation in Medicare.  In addition, the Office of
Inspector General will require that First American's successor
implement a company-wide compliance program to insure that in the
future the home health entities operate in accordance with the
law. 

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