Life Care Centers of America is set to pay a massive nursing home whistleblower settlement to resolve various charges of falsely billing Medicare for excess treatment.
The nursing home whistleblower settlement is in the amount of $145 million, which is a record amount in the False Claims Act litigation in regards to the nursing home industry.
The United States Department of Justice (DOJ) announced the settlement which will resolve two whistleblower lawsuits as well as an unjust enrichment lawsuit brought forward by the Department of Justice.
The allegations were brought against owner of Life Care, Forrest L. Preston, who has over 200 Life Care locations.
Overview of Medicare Whistleblower Allegations
Life Care allegedly raised treatment prices from 2006 to 2013 in order to qualify for Medicare’s “Ultra High” reinstatement levels.
These high payment levels are only resolved for the most ill or debilitated patients, who need at least 720 minutes of specialized therapy in two medical care disciplines per week.
According to the DOJ announcement, Life Care had “instituted corporate wide policies and practices designed to place as many beneficiaries in the Ultra High reimbursement level, irrespective of the clinical needs of the patients.”
The company had even allegedly maintained treatment, even after the therapy professionals recommended therapy should be discontinued.
For their participation in reporting the fraud, former Life Care employees and whistleblowers Tammie Taylor and Glenda Martin will share $29 million of the nursing home whistleblower settlement.
The government joined the FCA lawsuits in 2012, alleging Life Care had billed for excessive treatment for senior patients in order to maximize on Medicare reinstatement.
According to the Department of Justice, this nursing home whistleblower settlement is the largest in the department’s history involving the nursing home industry.
This nursing home whistleblower settlement sheds light on some of the most significant problems the FCA is designed to address, including using “statistical sampling to prove liability.”
In 2014, a Tennessee federal judge had allowed for statistical sampling to be allowed in a Life Care’s lawsuit. By allowing statistical sampling, whistleblower lawsuits can be streamlined and makes claim by the claim review process unnecessary.
The Life Care nursing home whistleblower settlement is also raising questions on the government’s ability to second guess treatment decisions by medical professionals.
In light of recent healthcare whistleblower lawsuits involving nursing homes and hospices, Medicare fraud has become a major concern for the Department of Justice.
According to a statement made by Life Care, the company denies any wrongdoing and denies that it engaged in any falsehoods in regards to Medicare reimbursement.
Company representatives state they are looking forward to finally resolving the litigation with the Life Care nursing home whistleblower lawsuit settlement.
The Whistleblower Lawsuits are U.S. ex rel. Martin et al. v. Life Care Centers of America Inc., Case No. 1:08-cv-00251 and U.S. ex rel. Taylor v. Life Care Centers of America Inc., Case No. 1:12-cv-00064, and U.S. v. Preston, Case No. 1:16-cv-00113, in the U.S. District Court for the Eastern District of Tennessee.
In general, whistleblower and qui tam lawsuits are filed individually by each plaintiff and are not class actions. Whistleblowers can only join this investigation if they are reporting fraud against the government, meaning that the government must be the victim, and that the alleged fraud should be a substantial loss of money.
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