Damon Clinical Laboratories agrees to $119 million settlement with U.S. Government.

BOSTON--(BUSINESS WIRE)--Oct. 9, 1996--Corning Clinical Laboratories Inc., (CCL) said today it has reached an agreement with the Department of Justice (DOJ) on behalf of a subsidiary, Damon Clinical Laboratories, which it acquired August 4, 1993.

This agreement settles claims for actions

Under terms of the settlement, Damon has agreed to pay the U.S. Government $119 million to conclude all federal and Medicaid criminal and civil claims relating to the billing by Damon of add-on blood tests ordered with chemistry panels, and agreed to a one-count criminal information plea. This settlement covers all matters investigated by the DOJ on behalf of the Inspector General, U.S. Department of Health and Human Services (HHS), relating to subpoenas issued to Damon beginning August 24, 1993.

The laboratory tests in question were commonly ordered by physicians/clients and were billed by Damon to various federal and state health care programs between 1988 and 1993.

Corning Clinical Laboratories President and Chief Executive Officer Kenneth W. Freeman said, "The practices in question were promptly eliminated following Corning's acquisition of Damon. These corrective actions significantly reduced the potential cost of the claim, however, the acquisition created a successor obligation for Corning Clinical Laboratories which we are fulfilling with this settlement.

"With this matter resolved," continued Mr. Freeman, "Corning Clinical Laboratories is better positioned to become an independent company as planned at year end and to pursue its strategy and objectives."

Corning Clinical Laboratories is one of the largest clinical laboratory testing companies in the United States, offering a broad range of routine and esoteric testing services used by the medical profession in the diagnosis, monitoring and treatment of disease and other medical conditions. Revenues in 1995 totaled $1.6 billion.

CONTACT: Corning Incorporated Investor Relations

Richard B. Klein, 607/974-8313

Katherine M. Dietz, 607/974-8217

Kathryn C. Littleton, 607/974-8206