The Law Firm of Piacentile, Stefanowski & Malherbe LLP

Life Care nursing homes pay $145 million to settle Medicare fraud

The skilled nursing facilities (SNFs) company Life Care agreed to pay a $145 million fine to settle charges of alleged health care fraud. According to the lawsuit filed by the U.S. Department of Justice, the company submitted false claims to TRICARE and Medicare for unreasonable and unnecessary services provided by its over 200 rehabilitation facilities across the country. 

Benjamin C. Mizer, Principal Deputy Assistant Attorney General acted on behalf of the two whistleblowers who brought the case to light: Glenda Martin and Tammie Taylor. The two women were former employees of the SNFs chain who witnessed several False Claims Act violations within the facilities. The settlement is the largest one reached with a skilled nursing facility so far. According to court documents, from January 2006 to February 2013, Life Care systematically inflated Medicare and TRICARE billings to increase its profits. 

image of a doctor

Higher quality treatments provided to patients do require more time and are consequently reimbursed for larger amounts of money. If a patient’s therapy needs more than 720 minutes a week, the treatment qualifies for an “Ultra High” Medicare reimbursement. The two qui tam relators who blew the whistle alleged that Life Care had internal policies that illicitly qualified as many patients as possible within this category, even when the provision of therapy was no longer necessary. Health care providers should, in fact, make their decisions solely basing upon a resident’s needs rather than the opportunity to unlawfully maximize their profits. The whole health care fraud scheme, however, benefitted just the company’s owner Forrest L. Preston, who is also the sole shareholder. The man has also been named in a separate lawsuit. 

As part of the settlement, the SNFs company had to enter into a 5-year agreement with the Department of Health and Human Services Office of Inspector General (HHS-OIG) to let an independent organization annually review all its facilities and assess whether the service billed to Medicare are legit or not. The agreement aims at ensuring that Life Care will now only provide treatments that are reasonably needed by residents.Due to their assistance in exposing the fraudulent scheme, Taylor and Martin have been awarded a percentage of the recovery resulting from their allegations. Their total reward amounted to $29 million they will now share. 

Article written by: Dr. Claudio Butticè, Pharm.D. 

Related Posts
  • SEC Awards $250,000 to Two Whistleblowers Read More
  • Money laundering, the art market, and the proposed ENABLERS Act Read More
  • Theranos whistleblower exposes widespread healthcare fraud Read More