FOR IMMEDIATE RELEASE                                         CIV
WEDNESDAY, FEBRUARY 12, 1997                       (202) 616-2765
                                               TDD (202) 514-1888

     WASHINGTON, D.C. -- Meris Laboratories will pay the United
States $5.2 million to settle allegations it submitted false
claims for reimbursement of laboratory tests under Medicare and
Medicaid, the Department of Justice announced today.
     Assistant Attorney General Frank W. Hunger of the Civil
Division and U. S. Attorney Michael J. Yamaguchi of San
Francisco, California, said the agreement settles claims that
Meris defrauded Medicare and Medi-Cal, the California Medicaid
program, by improperly billing them for various laboratory tests,
including cholesterol and serum iron and for "additional indices"
performed with complete blood count (CBC) tests.

     "Fraudulent billing like this contributes to the escalation
of health care costs for all Americans," said Hunger.  "The
federal government is determined to catch those who perpetrate
such fraud and prosecute them fully."

     The Department alleged that, beginning in 1992 and
continuing until this year, Meris, a San Jose, California,
clinical laboratory, defrauded the government.  It routinely
added medically unnecessary HDL cholesterol and serum iron tests
to panels it performed on automated machines, then billed the
health care programs separately for the tests, which physicians
had not specifically ordered.  

     The government also alleged that Meris defrauded the
Medicare and Medicaid programs by routinely billing for
additional CBC indices, which were not ordered by physicians and
were not medically necessary.  The additional indices, which are
generated automatically by laboratory machinery at no extra cost
to the laboratory, are merely manipulations of the results of
other tests already included in a complete blood count and are
rarely medically justified, the Department said.

     The Office of the Inspector General of the Department of
Health and Human Services and Meris agreed separately to a
"Corporate Compliance Agreement" in which Meris agreed to
undertake measures to ensure compliance with applicable laws and
Medicare rules and regulations in the future.  

     The agreement settles a dispute originally brought as a qui
tam case in the United States District Court in San Francisco in
U.S. ex rel. Prendergast and Silveira v. Meris Laboratories,
Inc., No. C-93-20549 JW.  As part of the settlement, Janice
Prendergast and Julia Silveira, who filed the suit on behalf of
the U.S., will receive approximately $781,000.

     The case was conducted jointly by the Civil Division of the
Department of Justice and the United States Attorney's office in
San Francisco with the assistance of HHS's Offices of Inspector
General in Washington, D.C., and San Francisco.