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Friday, October 11, 1996 - Page updated at 12:00 AM

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Whistle-Blower Wins $9 Million -- She Waited 3 Years In Medicare- Fraud Case

AP

BOSTON - After getting laid off as a sales representative for a medical laboratory, Jeanne Byrne found another job far more profitable: government whistle-blower in a Medicare-fraud case.

Byrne, who had to take odd jobs cleaning houses and baby-sitting while she waited three years for a resolution, hit a $9 million jackpot under a statute that rewards citizens for helping the government.

"It's still not real," the divorced mother of three said yesterday from her Bloomfield Hills, Mich., home.

Hours before, a federal judge in Boston had accepted a deal in which her former employer, Damon Clinical Laboratories, agreed to plead guilty and pay $119 million in fines for submitting fraudulent Medicare claims for unnecessary blood tests.

The lab was the latest Corning Inc. subsidiary to reach a multimillion-dollar settlement in the government's four-year Medicare-fraud investigation, and the fines are among the largest recovered in any health-care fraud case. The crimes happened in the years before Damon was bought by Corning in 1993.

Byrne's $9 million will be taken out of the fines, along with $1.5 million that will be split between two other whistle-blowers who worked at one of Damon's competitors.

"I didn't start off trying to be Joan of Arc or anything like that," Byrne said. "I loved my job."

As a representative for Damon's Detroit lab in 1993 selling testing services to doctors and hospitals, Byrne was in line to make

$150,000 to go with her company car and expense account. Then the government called.

Byrne was subpoenaed by the Justice Department to testify before a grand jury about the billing practices of National Health Laboratories, her previous employer.

National Health Laboratories had led doctors to order unneeded blood tests billed to Medicare.

Byrne, who had no medical background, said she didn't know then that certain tests she had been selling were unnecessary. National Health Laboratories reached a $100 million settlement in 1992.

While that settlement was still making news, Byrne said, Damon began billing for the unnecessary tests to swell profits.

"My reaction was disbelief that they would be doing this, knowing one of their biggest competitors was caught," Byrne said.

Damon, in response to fee reductions Medicare adopted in 1988 and 1989, began grouping certain blood tests so doctors would order more than were necessary. The suburban Boston company, which operated 13 labs nationwide, then billed Medicare for all of the tests, together called a "LabScan."

Damon fired Byrne in 1993, and she believes it was because of her testimony against National Health Laboratories.

After landing a job at a third lab, only to lose it to downsizing, Byrne found time to go through her boxes of records and notes, get a lawyer and go after Damon.

Lawyer David Haron took the case in June 1993, and he and Byrne worked in secret with the government for three years. Byrne, meanwhile, took odd jobs waiting for a resolution.

"My life has been on hold for 3 1/2 years," said Byrne, adding that she's not sure what she's going to do with all the money except pay off bills. "All I want to do is take these boxes of information . . . and just burn them. It's going to be nice to know I don't have anything to worry about."

Copyright (c) 1996 Seattle Times Company, All Rights Reserved.

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