The U.S. attorney in Philadelphia has filed a civil False Claims Act lawsuit against Ernst & Young alleging that the accounting giant provided nine hospitals with improper advice regarding Medicare billing for clinical laboratory services from 1991 to 1995. The hospitals, located in Connecticut, Indiana and Pennsylvania, subsequently settled civil charges alleging more than $900,000 in Medicare fraud. Submitting false claims or causing their submission is illegal, and Ernst & Young is potentially liable for three times the alleged amount of false claims, or a total of $2.7 million, as well as up to $10,000 per claim. Company officials could not be reached for comment at deadline. In another case involving an outside firm's advice, KPMG in October 2001 agreed to pay $9 million to settle allegations that it helped six hospitals defraud Medicare and Medicaid by preparing and certifying false cost reports. The company settled without admitting legal wrongdoing, and no criminal charges were filed. -- by Mark Taylor
Ernst & Young charged with leading hospitals astray
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