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ORANGE COUNTY BRIEFLY

Apria Healthcare Group to Settle U.S. Lawsuit for $1.65 Million

February 05, 1997

COSTA MESA — Apria Healthcare Group Inc. will pay $1.65 million to settle a federal lawsuit alleging that the company made illegal kickbacks to doctors in exchange for referrals of home health-services patients, the Justice Department said.

The company, which had tentatively accepted the agreement in December, admitted no wrongdoing. Apria said it is settling the case to avoid a costly legal battle.

The government charged that Apria submitted false Medicare claims for patients who were referred to the company in exchange for kickbacks to health-care providers in Georgia and Florida. The government identified one doctor group, Georgia Lung Associates of Austell, Ga., that the Justice Department said got payments under a sham consulting contract for referring Medicare patients for home-oxygen services. The Medicare federal health insurance program covers elderly and disabled Americans.

Apria has said the allegations involve operations by a corporate predecessor, Homedco Group Inc., which merged with Abbey Healthcare Group Inc. in June 1995 to form Apria.

The allegations were originally outlined in a private whistle-blower suit by Homedco's former Atlanta branch manager, Mark Parker. Under a federal law that entitles private citizens to a reward for filing lawsuits uncovering fraud against the government, Parker will get $454,839 of the amount paid by Apria to settle the claim, the Justice Department said. The Georgia doctor group will pay $346,000 to settle similar federal allegations, the government said.

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