$143 Million Settlement Reached in Nursing Home Chain’s False Claims Act Litigation

Life Care Centers of America, which operates 200 locations and is based in Tennessee, will pay $143 million to settle a False Claims Act (FCA) litigation in which it was alleged that the corporation had billed Medicare for excess treatment. According to the report of the case, this was a record FCA settlement for the nursing home industry.

The consolidated cases arose because of two whistleblower cases as well as an unjust enrichment lawsuit brought by the Department of Justice (DOJ) against the owner of Life Care. The two former employees will share $29 million in the settlement payout.

This settlement was reported to be the largest in the Justice Department’s history involving a skilled nursing home chain. The size of the settlement was based on Life Care’s ability to pay this amount. The government, which joined in the FCA cases in 2012, alleged excessive treatment of seniors in order to maximize Medicare reimbursements.

In 2014, a Tennessee federal court issued a ruling allowing statistical sampling in Life Care’s case. This sampling order dramatically streamlined FCA cases by making claim-by-claim review unnecessary.

The core of the government’s complaint against Life Care was that Life Care was accused of “jacking up treatment” from 2006 to 2013 in order to qualify for “ultra-high” reimbursement levels that Medicare pays for the neediest patients. That level of care provided for patients at least 720 minutes of skilled therapy in two medical disciplines every week.

Life Care allegedly continued treatment “even after treating therapists felt that therapy should be discontinued,” according to the DOJ.

U.S. ex rel. Martin, et al. v. Life Care Centers of America, Inc. and U.S. ex rel. Taylor v. Life Care Centers of America and U.S. v. Preston, In the U.S. District Court for the Eastern District of Tennessee.

Kreisman Law Offices has been handling Illinois nursing home abuse cases, nursing home negligence cases, wrongful death cases and medical negligence cases for individuals and families who have been harmed, injured or died as a result of the carelessness or negligence of a medical provider for more than 40 years in and around Chicago, Cook County and its surrounding areas, including Schaumburg, Calumet City, Homewood, Inverness, Arlington Heights, Orland Park, Deerfield, Vernon Hills, Buffalo Grove, Alsip, Chicago Heights, Maywood, Lincolnshire, Lincolnwood, Brookfield, Burr Ridge, Barrington, Hanover Park, Richton Park, Stickney, Westchester, Wilmette, Chicago (Roscoe Village, Hyde Park, Irving Park, Jefferson Park, East Garfield Park, Chinatown, Buena Park, Near North Side, Prairie District, Pill Hill, Pilsen, Wrigleyville, Koreatown), Western Springs and Round Lake, Ill.