A settlement reached to resolve False Claims Act Allegations against Life Care Centers of America Inc and its owner Forrest L. Preston.
The allegations arose by a lawsuit claiming Life Care Centers of America Inc and its owner Forrest L. Preston, intentionally caused skilled nursing facilities to submit false claims to Medicare and TRICARE for rehabilitation therapy services that were not reasonable, necessary or skilled.
According to the Department of Justice, between January 1, 2006 and February 28, 2013, Life Care submitted false claims for rehabilitation therapy by engaging in a systematic effort to increase its Medicare and TRICARE billings. Medicare reimburses skilled nursing facilities at a daily rate that reflects the skilled therapy and nursing needs of their qualifying patients. The greater the skilled therapy and nursing needs of the patient, the higher the level of Medicare reimbursement. The highest level of Medicare reimbursement for skilled nursing facilities is for “Ultra High” patients who require a minimum of 720 minutes of skilled therapy from two therapy disciplines (e.g., physical, occupational, speech), one of which has to be provided five days a week. Life Care set up corporate-wide policies and practices designed to place as many beneficiaries in the Ultra High reimbursement level and kept patients longer than was needed in order to continue billing for rehabilitation therapy.
Also, as part of the settlement, Life Care has agrees to 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.
These claims were brought forward by two former Life Care employees. The whistleblowers' share of the settlement will be $29 million.
