Philadelphia (July 22, 2004) -- Ernst & Young agreed to pay the government $1.5 million to settle claims that the Big Four firm provided improper advice that caused nine hospitals to submit false Medicare claims for outpatient clinical laboratory tests.

The complaint, filed in January in a Pennsylvania District Court by the U.S. Attorney’s Office, alleged that E&Y’s health care consulting division knowingly caused nine hospitals to submit more than 200,000 Medicare claims from 1991 through 1997 for certain outpatient blood tests that the government says were performed but weren't medically necessary.

The complaint alleged that Ernst & Young not only failed to discontinue its improper Medicare advice, but also prepared reports to the United States that knowingly failed to disclose the improper conduct of the client hospitals that had relied upon Ernst & Young for analysis and reporting of their improper billing.

Ernst & Young has denied that it caused any false or inaccurate claims to be submitted, or that it concealed or failed to disclose any false claims. Under the agreement, E&Y did not admit any wrongdoing.

-- WebCPA staff

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