Largest U.S. nursing care company pays $145 million settlement

Life Care Centers of America has agreed to pay out $145 million in a settlement with the United States government after it was discovered that they has been defrauding Medicare and TRICARE by overcharging for rehabilitation and therapy services that their patients did not require between 2006 and 2013.  Through their more than 220 skilled nursing care centers across the country, Life Care Centers of America engaged in fraudulent activities that involved overbilling elderly for services they did not request or did not require and also billing patients with less serious care requirements as though they needed the highest level of necessary care – “Ultra high” – which netted them more money from the federal government.

In some cases, the nursing care centers would keep patients for much longer than necessary to extend their stay and bleed more money out of the patients and the government. The lone shareholder of Life Care Centers of America, Forrest L. Preston, was implicated in a separate lawsuit for his profiting from the widespread scam.  “Billing federal healthcare programs for medically unnecessary rehabilitation services not only undermines the viability of those programs, it exploits our most vulnerable citizens,” said Eastern District of Tennessee U.S. Attorney Nancy Stallard Harr. “We are committed to working with our federal partners to protect both.”

Life Care Centers of America, the largest private nursing care company in the country, based in Tennessee, in addition to paying the hefty settlement, is now the subject of a five-year Corporate Integrity Agreement with the federal government, which means they are now required to be reviewed by independent agencies to assess the necessity of their rendered services for the next five years.  The allegations, legal action, and eventual settlement was brought to light by two former Life Care employees, who made authorities aware of the scheme via the whistleblowing protections of the False Claims Act. Tammie Taylor and Glenda Martin will receive a share of $29 million for their part in exposing the crime.

The lawsuit marks another success for federal and state regulators keeping a close eye on fraudulent and criminal activities by healthcare providers across the nation. Since 2009, the United States Justice Department reports that cases brought to light under the False Claims Act have yielded more than $31.6 billion in recovered funds, with $19.2 billion of that money coming from fraudulent healthcare charges, as in this case.

Profit-first, patient-second activity is wrong

The whistleblowing, investigation, litigation, and now the $145 million settlement is a surefire indicator that everybody from former employees to federal attorneys understand how immoral and wrong it is to take advantage of patients who are unable to look out for themselves.

Life Care Centers targeting of the elderly to overcharge the federal government for profit while putting the needs of those who put their life and trust in the hand of their care facilities second is grossly inappropriate, criminally illegal, and downright unacceptable. The activity was ongoing for years before it was put to an end, and it is highly likely that other companies are performing similar activities in the shadows, evading detection for now.  The hard work of state and federal litigators, as well as the bravery of two individuals, protected by a common-sense and effective whistleblowing legislation, combined to help end the criminal activity of a large corporation that seemingly felt itself to be above the law.

At Altman & Altman LLP, we believe in the strength of justice and the endless pursuit of those who take advantage of others. No matter how large the company, fraudulent actions like these are never okay, and we have 40 years of experience taking on anybody who attempts to take advantage of patients for profit.  If you or a loved one has been taken advantage of while under the care of a nursing home facility, call us today for a free consultation at 617-492-3000 or toll-free at 800-481-6199.  We are available 24/7.

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