November 5, 1997 Vendell Healthcare Inc.

Health Insurance Company Vendell Healthcare Inc. has agreed to pay over $4 Million Dollars to settle claims asserted in a qui tam action filed by several of its former employees. The allegations of the case were that Vendell admitted and treated federally-insured patients without regard to medical necessity, billed CHAMPUS and FEHBP for services which it had not rendered, and entered bogus contracts with doctors to pay kickbacks for patient referrals.

Under the False Claims Act the former employees who filed the qui tam case may receive 15 to 30 percent of the $4 Million Dollar settlement.

See U.S. Dept of Justice Press Release 11/5/97

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