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.

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