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. ##### 95-149