Life Care Centers reaches $145M settlement

Life Care Centers of America Inc. has reached a $145 million settlement, the largest the U.S. Department of Justice has ever entered with a skilled nursing facility.

The DOJ alleges Life Care, the nation’s largest private nursing home company, and sole owner Forrest L. Preston knowingly caused skilled nursing facilities to submit false claims for therapy services that weren’t reasonable or necessary to Medicare and TRICARE, which provides civilian health benefits for U.S. military personnel, retirees and their dependents.

“Billing federal health care 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 a press release.

The complaint alleges that from January 2006 to February 2013 Life Care instituted corporate-wide policies that kept residents longer than needed and placed them in the highest reimbursement category for therapy regardless of actual needs. Top officials also dispensed bonuses based on how well employees or facilities met those goals and overruled or ignored the recommendations of its therapists, according to federal prosecutors.

Life Care billed almost 68 percent of its Medicare rehab days at the most expensive level in 2008 compared to a national average of about 35 percent, according to the complaint. Medicare paid Life Care more than $4.2 billion between January 2010 and February 2016.

In a separate suit, the DOJ argued Preston was “unjustly enriched” by the scheme. The settlement resolves both cases. Life Care will pay $45 million of the settlement up front and the balance over three years. The company also entered into a five-year corporate integrity agreement with the Department of Health and Human Services Office of Inspector General, which requires an annual independent review of therapy services billed to Medicare.  

in its response to the government, Life Care denied all of those allegations. “We deny in the strongest possible terms that Life Care engaged in any illegal or improper conduct. We are, however, pleased to finally put this matter behind us, without any admission of wrongdoing,” Preston said in a statement.


Topics: Facility management , Leadership , Rehabilitation