FOR IMMEDIATE RELEASE                                         CIV
THURSDAY, AUGUST 1, 1996                           (202) 514-2008
                                               TDD (202) 514-1888

     WASHINGTON, D.C. -- The Justice Department today filed an
amended complaint against a Florida psychiatric hospital,
alleging that it improperly admitted several hundred elderly
patients with brain disorders like Alzheimer disease and passed
the costs on the taxpayers by charging federal insurance programs
for unnecessary care.  

     The complaint alleges, in general, that Charter Hospital, of
Kissimmee, defrauded the federal government by submitting bills
for the treatment of elderly demented patients who either should
not have been admitted to the hospital or who were kept at the
hospital far too long.        

     Assistant Attorney General Frank Hunger of the Civil
Division said the Department filed on August 1 an amended
complaint against Charter Hospital of St. Louis, Inc., a Missouri
corporation doing business as Charter Hospital Orlando south
("Charter Hospital").

     More specifically, the complaint alleges as follows:

     (1)  Charter Hospital has admitted hundred of elderly
demented patients, primarily from nursing homes and assisted
living facilities, despite knowing that these patients did not
need acute, in-patient psychiatric treatment;     

     (2) To the extent any of these patients may have needed
acute-inpatient psychiatric care, Charter Hospital knowingly
hospitalized these patients longer than necessary;

     (3) Charter Hospital allowed a large number of these elderly
demented patients to admit themselves voluntarily to the
hospital, often after they had been transported against their
will from nursing homes and assisted living facilities, despite
knowing that these patients were incapable of making knowing and
willful decisions concerning their admissions.  In fact, the
complaint alleges that Charter Hospital sometimes used deceit to
secure patients' signatures on voluntary admission forms; and

     (4) Charter Hospital falsified certain medical records to
reflect, contrary to fact, that these elderly demented patients
were improving during their stays at the hospital and that
therapy sessions were conducted and attended by these patients.  

     This action was initially filed under seal on or about May
1994 by two former employees of Charter Hospital pursuant to the
whistle-blower provisions of the False Claims Act.  The United
States took over the case in September 1995.  The Court
subsequently unsealed the complaint.  The case is being handled
by the Civil Division of the Department of Justice in Washington,
D.C., and investigated by the Orlando, Florida offices of the
Defense Criminal Investigative Service and the Federal Bureau of