The U.S. Department of Justice announced that Life Care Centers of America, Inc. (Life Care) and its owner, Forrest L. Preston, agreed to pay $145 Million to resolve a lawsuit that alleged that Life Care violated the federal False Claims Act. According to Justice Department’s announcement, the lawsuit alleged that Life Care knowingly caused skilled nursing facilities to submit false claims for payment to Medicare and TRICARE for services that were not “reasonable, necessary, or skilled.” Quoted in the announcement was the head of the Justice Department’s Civil Division, who stated “this resolution is the largest settlement with a skilled nursing facility chain in the department’s history.”
According to the pleadings filed in one of the cases, “…Life Care’s former Chief Operating Officer, aggressively drove the company’s push for increased Medicare revenue” and “…frequently told her employees, their job was to make money for Forrest Preston, the founder, sole shareholder, and Chairman of the Board of Life Care.”
The announcement states the allegations resolved by the settlement were originally brought by two former Lifecare employees, Tammie Taylor and Glenda Martin, under the whistleblower provisions of the False Claims Act. The federal government intervened in those cases and filed their its own complaints, according to the press release issued by the Department of Justice.
The court pleadings filed in one of those cases claims Life Care is a for-profit corporation headquartered in Cleveland, Tennessee that manages and/or owns over 200 skilled nursing facilities across the country. According to the website of Life Care Centers of America operates more than a dozen facilities in Indiana, including the following:
- The Lane House (Crawfordsville, IN)
- Parkview Care Center (Evansville, IN)
- Life Care Center of Fort Wayne (Fort Wayne, IN)
- Hammond – Whiting Care Center (Hammond, IN)
- Westside Garden Plaza (Indianapolis, IN)
- Westside Village Nursing Center (Indianapolis, IN)
- The Bridge At Westside Garden Plaza (Indianapolis, IN)
- Life Care Center of LaGrange (LaGrange, IN)
- Life Care Center of Michigan City (Michigan City, IN)
- Mitchell Manor (Mitchell, IN)
- The Woodlands (Muncie, IN)
- Green Valley Care Center (New Albany, IN)
- Rensselaer Care Center (Rensselaer, IN)
- Life Care Center of Rochester (Rochester, IN)
- Life Care Center of Valparaiso (Valparaiso, IN)
- Life Care Center of The Willows (Valparaiso, IN)
- Heritage Healthcare (West Lafayette, IN)
According to the announcement, the Justice Department has recovered more than $31.6 BILLION through False Claims Act cases, with more than $19.2 BILLION of that amount recovered in cases involving fraud against federal health care programs.
The press release noted that the claims resolved by the settlement were allegations only; there was no determination of liability.
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