The Whistleblower Lawyer

Record False Claims Act Settlement Involving Billionaire’s Skilled Nursing Facility Chain

Nursing Facility Fraud Lawyer

The largest False Claims Act (FCA) settlement concerning a skilled nursing facility (SNF) chain in the history of the Department of Justice occurred in late October, 2016. Life Care Centers of America Inc. (Life Care), along with its owner, Forrest L. Preston, reached an agreement to pay $145 million. It is alleged that false claims for rehabilitation therapy services that were submitted to Medicare and TRICARE were not skilled, reasonable, or even necessary. Life Care runs over 220 SNFs in the U.S. and is based in Cleveland, TN.

As part of the settlement, Life Care said it would pay $45 million up front, with the remaining $100 million to be paid over three years. Also as part of the settlement, Life Care entered into a Corporate Integrity Agreement with the Department of Health and Human Services Office of Inspector General, which lasts five years and extends across the entire chain of facilities. The Corporate Integrity Agreement requires annual reviews by an independent organization regarding the medical necessity and appropriateness of all therapy services that Life Care bills for Medicare patients.

HHS Inspector General Daniel R. Levinson commented, “The corporate integrity agreement with Life Care is designed to ensure that it only provides therapy based on the individual needs of each resident.”

Filed in 2012 by a whistleblower, the suit accused the company of purposefully submitting false claims for various rehab therapies from 2006 to 2013 to Medicare and TRICARE (the health insurance program for the military) in order to fraudulently increase revenues. In a separate case, the government contended that Preston, the billionaire owner, had unjustly profited personally from the false billings scheme. This settlement covers both cases.

The amount of the settlement was based upon the ability of the company to pay. The whistleblowers, Tammie Taylor and Glenda Martin, two former Life Care employees, brought the qui tam case. The reward they will split amounts to $29 million.

In a statement, U.S. Attorney Nancy Stallard Harr for the Eastern District of Tennessee declared, “Billing federal healthcare programs for medically unnecessary rehabilitation services not only undermines the viability of those programs, it exploits our most vulnerable citizens. We are committed to working with our federal partners to protect both.”

Some estimate that ten percent of the money that the government spends on healthcare programs is lost to fraud. Whistleblowers are strongly encouraged to bring to light any information about fraud and false claims that they might have.

Working with whistleblowers tirelessly to shed light on fraudulent practices.

If you think you have the facts needed to bring a whistleblower case, the experienced whistleblower attorneys at the Louthian Law Firm can review your case and help you file the appropriate disclosure statement. Under some circumstances, the government will intervene, or join in your lawsuit.

Your chances of succeeding are greater if your whistleblower claim is substantive, clear, and to the point. Because of this, meeting with a qualified whistleblower attorney can increase your chances of winning. The Louthian Law Firm can help you form your claim so that the government will be more inclined to intervene in your case; government intervention can sometimes increase the chances of recovering reward money. Even if the government decides not to intervene, it could still be a good idea to pursue your case without government involvement. Our strong support system can assist you through every step of the process.

For a free, confidential evaluation of your case, call the Louthian Law Firm today at 1-803-454-1200 or, if you prefer, you can fill out our online contact form.


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