FOR IMMEDIATE RELEASE                                         CIV
FRIDAY, AUGUST 29, 1997                            (202) 616-2765
                                               TDD (202) 514-1888
                                 
  U.S. SUES TWO TENNESSEE MEN AND RELATED HEALTH CARE COMPANIES 

     WASHINGTON, D.C. -- The Department of Justice today sued a
health care management company and the former executive director
of a home health agency, both of Chattanooga, Tennessee, for
fraudulently using the home health agency and others to
overcharge Medicare at least $30 million for inflated management
expenses related to the operation of several home health care
agencies.  

     The companies and the wife of the owner of the management
company also were named as defendants.

     Assistant Attorney General Frank W. Hunger, in charge of the
Civil Division, said the complaint was filed in U.S. District
Court for the Eastern District of Tennessee at Chattanooga
against William T. Rogers; James C. Callaway Jr.; Alpha Medical
Inc., formerly Alpha Medical Management Inc. (Alpha); and the
not-for-profit Superior Home Health Care of Chattanooga Inc.
(SHHC-C), also known as The Charitable Healthcare Foundation Inc. 
Rogers, Callaway, Alpha and SHHC-C were charged with violations
of the civil False Claims Act and common law.  Rogers' spouse,
Gayle M. Rogers, was sued solely under common law.

     "The Department will not tolerate any fraud or cheating of
the Medicare program," said Hunger.  "Those who engage in
deceptive practices or otherwise abuse the program will be held
accountable for their actions.  We want each and every health
care provider participating in the Medicare program to understand
that clearly."

     William Rogers is the sole shareholder of Alpha, the suit
said.  SHHC-C was a home health agency that Alpha managed.  Alpha
also managed other home health agencies that operated under the
name of Superior Home Health Care, some of which initially were
owned by Callaway then later sold to other SHHC-C directors, and
other agencies that were owned by relatives of William and Gayle Rogers.

     The complaint alleges that William T. Rogers, Callaway,
Alpha and SHHC-C conspired with each other and others to obtain
Medicare reimbursement for the management fees the various home
health agencies paid Alpha.  The suit says the fees were not
reimbursable because Alpha and the home health agencies were
related organizations within the meaning of Medicare rules.  The
agencies, therefore, were entitled only to reimbursement up to
the amount of Alpha's reasonable and related costs for patient
care in managing the home health agencies, excluding any profit. 

     According to the complaint, the reimbursement claims
exceeded Alpha's reasonable costs by more than $30 million, which
were salaries Alpha paid William T. and Gayle Rogers in 1990
through 1993.

     The complaint maintains that the parties were related
because William T. Rogers was the president of SHHC-C's board and
was SHHC-C's executive director, administrator, treasurer and
bank note guarantor, when Alpha initially contracted with SHHC-C
to manage SHHC-C in 1986.  Gayle Rogers also was on the SHHC-C
board at that time.  

     Moreover, at that time, Callaway, a long-time personal and
business associate of William T. Rogers, was a director of SHHC-C,
 according to the complaint.  The other members of the SHHC-C
board at the time were Todd Gardenhire, Rogers' stockbroker;
Charles Levine, Rogers' certified public accountant; and Charles
Johnson, Callaway's brother-in-law.  

     The complaint further alleges that Callaway, while a
director of SHHC-C, contracted with Alpha to manage three home
health agencies he owned.  Two other home health agencies that
contracted for Alpha's management were owned by two of Gayle
Rogers' sisters' husbands.  Gardenhire, Levine, Johnson and Gayle
Rogers' sisters' husbands were not named as defendants in the
suit.

     According to the complaint, William T. Rogers, Callaway,
SHHC-C, and Alpha also conspired to submit false bid letters to
the Medicare fiscal intermediary in 1988 and 1990 to prevent a
finding that the organizations were related.  The falsified
documents allegedly were intended to establish the existence of
competitive bids or a market search for other management
companies that, in fact, never occurred. 

     Under the False Claims Act, the United States may be awarded
three time its damages plus a $5,000 to $10,000 civil penalty for
each false claim or statement.
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97-355