Care Centers to Pay $145M in FCA Settlement
HealthLeaders Media News, October 25, 2016
In the largest settlement with a
skilled nursing facility chain in DOJ history, federal prosecutors say Life
Care Centers of America billed Medicare and TRICARE for unnecessary rehab
Life Care Centers of America, Inc. and its owner Forrest L.
Preston will pay $145 million to resolve whistleblower False Claims Act
allegations, the Department
of Justice said Monday. The settlement is the largest FCA settlement with a skilled
nursing facility chain in DOJ history.
The federal lawsuit against Cleveland, TN-based Life Care
Centers alleged the SNF chain charged TRICARE and Medicare "for
rehabilitation therapy services that were not reasonable, necessary, and/or
skilled," DOJ stated.
Under the terms of the
settlement, Life Care and its more than 220 SNFs in 28 states will enter into a
five-year Corporate Integrity Agreement with the U.S. Department of Health and
Human Services Office of Inspector General, DOJ said.
healthcare programs for medically unnecessary rehabilitation services not only
undermines the viability of those programs, it exploits our most vulnerable
citizens," said Nancy Stallard Harr, U.S. Attorney for the Eastern
District of Tennessee, in remarks accompanying the announcement.
Based on the company's
ability to pay, the settlement will be paid over the next three years, and
includes a $45 million initial payment. The payback resolves allegations that
between January 1, 2006 and February 1, 2013, Life Care submitted false claims
for rehabilitation therapy in a systematic effort to increase its Medicare and
Life Care used corporatewide policies
designed to place as many beneficiaries in the highest reimbursement category
for therapy irrespective of the clinical needs of the patients, DOJ said.
Life Care also kept patients longer
than was necessary to continue billing for rehab, even after therapists felt
that therapy should be stopped. Life Care tracked the minutes of therapy
provided to each patient and number of days in therapy to ensure as many
patients as possible were at the highest level of reimbursement for the longest
The settlement also resolves allegations brought in a separate
federal lawsuit that Preston—the sole shareholder of Life Care—was unjustly
enriched by the scheme.
The federal lawsuit was initiated on whistleblower allegations
made by former Life Care employees Tammie Taylor and Glenda Martin, who will
share $29 million of the settlement.
Life Care quoted Preston in a media release on Monday that
acknowledged the settlement but denied wrongdoing. "We deny in the
strongest possible terms that Life Care engaged in any illegal or improper
conduct," Preston said.
"We are, however, pleased to finally put this matter behind
us, without any admission of wrongdoing, and we look forward to continuing our
efforts to deliver quality care and services to our patients, residents, and