June 25,2002

Health Fraud Case Under the False Claims Act

Today attorneys announced that the General American Life Insurance Company has agreedto pay the government $76 million to resolve Medicare fraud charges brought by whistle blowers andthe Department of Justice under the civil False Claims Act. This case marks the tenth settlement ofMedicare fraud and abuse charges brought under the civil False Claims Act against Medicare carriersand intermediaries since 1993. Counting today’s settlement, these ten defendants have agreed to payback a total of $416 million in taxpayer funds, according to the lawyer for the whistle blowers intoday’s case.

Sen. Chuck Grassley, the Senate author of the 1986 whistle blower amendments to the FalseClaims Act, made the following comment on today’s case.

“The evidence shows company employees wished themselves a ‘Merry Christmas’ on heavyfraud days. Today, the holiday’s over. I appreciate the prosecution of this case and the recovery ofmisspent tax dollars to the U.S. Treasury. As I’ve said many times, every tax dollar that goes tofraud doesn’t help a patient. We don’t have a penny to spare for fraud.”