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 Life Care Agrees To $145 Million False Claims Settlement

In a landmark settlement, Life Care Centers of America, one of the nation’s largest private skilled nursing care companies, has agreed to pay $145 million to resolve charges that it overbilled the government for rehabilitation therapy services. Life Care, based in Cleveland, Tenn., owns and operates more than 200 skilled nursing care centers in 28 states.
The Department of Justice says the resolution is the largest settlement with a skilled nursing center chain in its history.
The government lawsuit alleges that Life Care violated the False Claims Act by knowingly causing skilled nursing facilities to submit false claims to Medicare and TRICARE for rehabilitation therapy services that were not “reasonable, necessary, or skilled.”
The complaint alleges that during the period from Jan. 1, 2006, to Feb. 1, 2013, Life Care instituted corporate-wide policies and practices designed to place as many beneficiaries in the Ultra High therapy reimbursement level irrespective of the clinical needs of the patients. Life Care has strongly disagreed with the allegations and believes that it was entitled to payment for services rendered.
The complaint also alleges that Life Care sought to keep patients longer than was necessary in order to continue billing for rehabilitation therapy.
“Billing federal health care programs for medically unnecessary rehabilitation services not only undermines the viability of those programs, it exploits our most vulnerable citizens,” says U.S. Attorney Nancy Stallard Harr for the Eastern District of Tennessee. “We are committed to working with our federal partners to protect both.”
“We deny in the strongest possible terms that Life Care engaged in any illegal or improper conduct,” says Life Care owner Forest Preston. “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 their families.”
As part of the settlement, Life Care has entered into a five-year chain-wide Corporate Integrity Agreement with the Department of Health and Human Services Office of Inspector General that requires an independent review organization to annually assess the medical necessity and appropriateness of therapy services billed to Medicare.
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