Dive Brief:
- Tennessee-based Life Care Centers of America, owner and operator of more than 220 U.S. skilled nursing facilities (SNFs) under owner Forrest L. Preston, has agreed to a $145 million settlement to resolve allegations that the company submitted false claims to Medicare and TRICARE for unwarranted rehabilitation therapy services, the Department of Justice announced.
- The settlement is the DOJ's largest ever with a skilled nursing facility chain, stated Principal Deputy Assistant Attorney General Benjamin C. Mizer of the Justice Department’s civil division.
- Under the settlement, Life Care has also agreed to a five-year corporate integrity agreement in which an independent review organization will perform an annual review of the chain's services billed to Medicare.
Dive Insight:
The settlement is the latest of many in the government's crackdown on fraud involving federal healthcare programs, including others that have recently involved other skilled nursing facilities or nursing home pharmacies.
Those include accusations that the operator of the Chicago-based Esformes Network of skilled nursing homes and assisted living facilities in Florida bilked Medicare and Medicaid for $1 billion over the course of 14 years in what the DOJ billed this summer as "the largest single criminal healthcare fraud case ever brought against individuals by the Department of Justice." Even more recently, nursing home pharmacy Omnicare agreed to pay $28.1 million to settle allegations it solicited and received kickbacks from drug manufacturer Abbott Laboratories. That followed nursing home pharmacy PharMerica agreeing to pay $9.2 million in 2015 for taking alleged kickbacks from Abbott.
The latest settlement resulted from whistleblower lawsuits filed under the False Claims Act by former Life Care employees, and was also credited to the government's Health Care Fraud Prevention and Enforcement Action Team (HEAT) initiative.
Under the government's lawsuit, it argued Life Care had instituted corporate-wide policies and practices aimed at maximizing "Ultra High" level reimbursements – intended for patients receiving the highest level and amount of skilled therapy – regardless of patients' actual needs. It also accused the company of keeping patients in rehabilitation therapy longer than necessary or advised by the treating therapists.
"Life Care carefully tracked the minutes of therapy provided to each patient and number of days in therapy to ensure that as many patients as possible were at the highest level of reimbursement for the longest possible period," the DOJ argued, adding it will continue to fight to protect the integrity of healthcare programs to ensure services are provided for clinical rather than financial reasons.