US government agency makes overpayment determination for laboratory services

US government agency makes overpayment determination for laboratory services Stockholm, Sweden - Gambro AB (Stockholm Stock Exchange: GAMBaST, GAMBbST), a leading international medical technology and healthcare company, today announced that an overpayment determination for laboratory services has been made by a US government agency. As announced by Gambro in August 1998, the billing records of its US subsidiaries for laboratory testing, Gambro Health- care Laboratory Services, Inc. and Dialysis Holdings Laboratory Services, Inc. (located in Ft. Lauderdale and Deland in Florida, respectively), are the subject of investigations regarding Medicare billings. Both investigations arose out of Operation Restore Trust, a project conducted by multi-government agencies that targeted numerous health care providers in a number of states. The agencies have requested the records from two different periods, namely January, 1996 through December, 1996 and January, 1997 through May, 1998 for the Ft. Lauderdale laboratory, and June, 1996 through December, 1996 and January, 1997 through May, 1998 for the Deland laboratory. Health Care Financing Administration (HCFA), which is one of the agencies involved, has made overpayment determinations for a total amount of USD 18.8 million of which USD 14 million relate to the first period for the Ft. Lauderdale laboratory and USD 4.8 M to the second period for the Deland laboratory. Upon request by HCFA, these amounts have been repaid in order to avoid interest penalties. The respective rights of appeal of the laboratories have been preserved. Total billing by the Ft. Lauderdale laboratory amounted to USD 16.3 million for the first period and USD 37.9 million for the second period. The Deland laboratory closed in November, 1998 and transferred its laboratory services to the Ft. Lauderdale laboratory. The refunded amounts have been charged against the third quarter results of operations. It is not known whether additional claims will be made with respect to the second period for the Ft. Lauderdale laboratory and the first period for the Deland laboratory. It is also not known whether the United States Department of Justice or the United States Attorney's office will take any action against either laboratory. The validity and accuracy of the overpayment determinations currently is the subject of discussion with HCFA. The Company believes that not all relevant information has been considered and has advised the agencies of its intent to appeal the overpayment determinations. The Company continues to cooperate fully with the government and has estab- lished a productive dialogue with government representatives. Because of the government investigations, the Ft. Lauderdale laboratory and the Deland laboratory respectively discontinued submitting claims for its laboratory services regarding Medicare effective June 1, 1998 and July 1, 1998. From that date up to August 31, 1999 the Company has recorded Medicare revenues of approximately USD 47 million for such services. For further information please contact: Mats Wahlström, President, Gambro Healthcare, Inc., tel. +1-303-232-6800 Lars Granlöf, Senior Vice President, CFO, tel. +46-8-613 65 00 Gambro is a global medical technology and healthcare company with leading positions in renal care - services and products - and blood component technology (BCT). Gambro is one of the leading providers of kidney dialysis services in the world. Gambro treats about 42,000 patients in 565 clinics worldwide. Renal care products comprise dialyzers, dialysis machines, blood lines and dialysis concentrates. BCT includes products for the separation and handling of blood components. The group, with revenue of approximately SEK 18 billion (USD 2.2 billion), has approximately 17,000 employees in some 40 countries. ------------------------------------------------------------ Please visit http://www.bit.se for further information The following files are available for download: http://www.bit.se/bitonline/1999/10/19/19991019BIT00470/bit0001.doc http://www.bit.se/bitonline/1999/10/19/19991019BIT00470/bit0002.pdf