FOR IMMEDIATE RELEASE                                         CIV
FRIDAY, MAY 23, 1997                               (202) 616-2765
                                               TDD (202) 514-1888
                                 
    TEXAS FIRM WILL PAY U.S. $1.3 MILLION TO SETTLE FRAUD CASE
   IN CONTINUING FEDERAL INVESTIGATION OF HEALTH PUMP INDUSTRY


     WASHINGTON, D.C. -- A durable medical equipment supplier and
its president will pay the United States $1,350,000 to settle
allegations the company submitted false claims to the Medicare
program for payment of lymphedema pumps and sleeves, the
Department of Justice announced today.  

     Jalopy Shoppe Inc., doing business as Mediserv Inc., of
Sherman, Texas, and its president, Jimmy E. Mefaffey,
misrepresented to Medicare the product it was selling in order to
obtain an inflated reimbursement amount from Medicare, according
to Assistant Attorney General Frank Hunger of the Civil Division.

     "We will not tolerate fraud in the health care area,
especially when it affects a key government program like
Medicare," said Hunger.  "All those who participate in the
Medicare program should know that we intend to vigorously
investigate and prosecute even the slightest hint of fraud."

     Mediserv sells pneumatic compressors, and sleeves used with
the compressors, to Medicare beneficiaries for home use.

     The Department said Mediserv submitted claims to Medicare
using a procedure code that is reserved for compressors that are
segmental and that have calibrated gradient pressure, a standard 
that the pumps Mediserv actually sold did not meet.  Medicare,
based on Mediserv's claims, reimbursed the company approximately
$3,500 per pump when the pump Mediserv sold to patients insured
under Medicare cost less than $650. 

     "This settlement is part of a larger nationwide
investigation of the lymphedema pump industry that has been
ongoing for some time," Hunger said.  "The Civil Division and
United States Attorney's offices around the country have resolved
numerous cases of inflated billing and other abuses by suppliers
of lymphedema pumps.  

     "We will continue to pursue those persons who defraud the
Medicare program," he said.

     The settlement with Mediserv resolves a qui tam action,
United States ex rel. Wells v. Huntleigh Technology PLC, et al.,
as against Mediserv, which is pending in U.S. District Court in
Newark, New Jersey.  The relator, Ronald Wells, will receive
$243,000 of the government's recovery.
                              #####
97-217