WASHINGTON (Legal Newsline) — The U.S Department of Justice announced this week Life Care Centers of America Inc. (Life Care) and owner Forrest L. Preston will pay $145 million after allegations of False Claims Act violations.


“This resolution is the largest settlement with a skilled nursing facility chain in the department’s history,” said principal deputy assistant attorney general Benjamin C. Mizer, head of the Justice Department’s Civil Division. “It is critically important that we protect the integrity of government health care programs by ensuring that services are provided based on clinical rather than financial considerations.”


According to the department, Life Care submitted false claims between Jan. 1, 2006, and Feb. 28, 2013, for rehabilitation therapy services that were not reasonable or necessary. Life Care allegedly conducted company-wide policies across its 220 skilled nursing facilities that led to the violations.

It would purportedly attempt to place as many patients as it could in the highest reimbursement level possible, not caring if each specific case demanded it.

Because of these alleged actions, the department said many patients received unreasonable and unnecessary services.


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

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