Skilled nursing facility chain inks $145M settlement in false claims case

Cleveland, Tenn.-based Life Care Centers of America, which owns more than 220 skilled nursing facilities across the country, and its owner have agreed to pay $145 million to resolve a False Claims Act case, according to the Department of Justice.

According to the lawsuit, Life Care defrauded the government by causing skilled nursing facilities to submit false claims to Medicare and Tricare for rehabilitation services between Jan. 1, 2006, and Feb. 1, 2013.

The government alleged Life Care had corporatewide policies in that put Medicare and Tricare beneficiaries in the highest reimbursement category for therapy, regardless of their clinical needs. This resulted in unnecessary therapy being provided to many beneficiaries, according to the DOJ.

Life Care also defrauded the government by keeping patients for treatment longer than was necessary to continue billing for rehabilitation services, according to the DOJ.

In addition to the monetary settlement, Life Care will enter into a five-year corporate integrity agreement with HHS' Office of Inspector General.

"This resolution is the largest settlement with a skilled nursing facility chain in the [Department of Justice's] history," said Principal Deputy Assistant Attorney General Benjamin C. Mizer, who is head of the DOJ's civil division. "It is critically important that we protect the integrity of government healthcare programs by ensuring that services are provided based on clinical rather than financial considerations."

Two former Life Care employees originally brought the allegations against the SNF chain in qui tam, or whistle-blower, lawsuits under the False Claims Act.

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