FOR IMMEDIATE RELEASE                                                   CIV
MONDAY, MARCH 20, 1995                             (202) 514-2007
                                                         TDD (202) 514-1888
                                     
          ALLIED CLINICAL LABS TO SETTLE CLAIMS FOR $4.9 MILLION

     WASHINGTON, D.C. -- The Department of Justice announced 
today that it has reached an agreement with Allied Clinical
Laboratories to accept $4.9 million to settle claims that Allied
submitted false claims for reimbursement of laboratory tests to
the Medicare Program.  
     Assistant Attorney General Frank W. Hunger, who heads the
Civil Division, and U.S. Attorney in Cincinnati, Ohio, Edmund A.
Sargus, Jr., said that the agreement settles allegations that
Allied inserted false diagnosis codes into many of the Medicare
billings processed by Allied's Cincinnati billing office between
late 1992 through mid-1994 and by Allied's Salt Lake City billing
office from 1991 through 1994.
     The government alleged that Allied defrauded the government
by inserting false diagnosis codes into many of the Medicare
billings submitted by Allied's Cincinnati and Salt Lake City
billing offices.  Medicare regulations provide that Medicare will
not pay for certain "limited coverage" blood tests such as the
prostate-related tests involved in this case unless a patient's
physician provides an appropriate diagnosis which shows that they
are medically necessary.  In many instances, these diagnoses were
not provided by physicians, yet Allied included them in its
billings to Medicare.    
     This agreement settles a dispute which was originally
brought as a qui tam case in the U.S. District court in
Cincinnati in U.S. ex rel. Wagner and Dehner v. Allied Clinical
Laboratories, Inc., No. C-1-94-092.  
     The Department of Health and Human Services Office of
Inspector General and Allied have agreed to a separate "Corporate
Integrity Agreement" in which Allied agrees to undertake measures
to ensure compliance with applicable laws and Medicare rules and
regulations in the future.
     The case was conducted jointly by the Civil Division of the
Department of Justice and the United States Attorney's office for
the Southern District of Ohio with the assistance of the
Department of Health and Human Services Office of Inspector
General, the Railroad Retirement Board Office of Inspector
General, the FBI and the Department of Defense Criminal
Investigative Service.
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95-149