FOR IMMEDIATE RELEASE CIV THURSDAY, OCTOBER 20, 1994 (202) 616-2765 TDD (202) 514-1888 DEPARTMENT OF JUSTICE SAYS ULTRAMED WILL PAY U.S. $2.1 MILLION TO SETTLE FALSE MEDICARE CLAIM WASHINGTON, D.C. -- UltraMed Inc. will pay the United States $2.1 million to settle civil claims that it billed Medicare for home model pneumatic compressors, commonly referred to as lymphedema pumps, that did not meet prescribed engineering requirements, the Department of Justice announced today. Curative Technologies Inc., UltraMed's parent corporation, will guarantee the payment. Assistant Attorney General Frank W. Hunger, in charge of the Civil Division, said the settlement resolves a qui tam complaint, United States ex rel. Keith & Visauer v. Curative Technologies, Inc., filed in U.S. District Court in Madison, Wisconsin, July 1, 1993. The government alleged that the defendants submitted false Medicare claims for the pumps. Lymphedema pumps are used to treat patients suffering from a severe circulatory condition called "chronic intractable lymphedema." Lymphedema pumps qualify for up to $5,500 reimbursement under Medicare. However, Medicare requires that certain conditions be met before a lymphedema pump distributor can bill the government for that amount. Under Medicare regulations, pumps must meet certain engineering requirements and in most cases the patient must in fact be suffering from chronic intractable lymphedema. A government investigation showed that UltraMed violated those regulations by submitting claims under the Medicare code that paid the highest reimbursement rate even though the pump did not meet the required engineering standard for that code. "This settlement demonstrates the government's determination to pursue and prosecute those who would defraud Medicare for their own benefit," said Hunger. He said Ultramed's payment was more than twice the government's losses. Under the qui tam provisions of the act, Joy Keith and Brian Visauer, who filed the original action on behalf of the government, are entitled to receive between 15 and 25 percent of the proceeds. Keith and Visauer also are entitled to contest the adequacy of the settlement in federal court, which they have informed the government they plan to do. The federal False Claims Act permits the government to recover three times the amount of its actual loss plus civil penalties of $5,000 to $10,000 for each false claim. ##### 94-602