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Billionaire Nursing Home Owner Sued for Fraudulent Rehabilitation Therapy Claims to Medicare and TRICARE

A billionaire owner of one of America’s biggest nursing home chains has just been convicted of intentionally overbilling federal healthcare programs.  According to a recent article from Forbes, the Life Care Centers of America owner, Forrest Preston, has agreed to pay $145 million to settle the government lawsuit.  This settlement, announced on October 24th, is by far the largest ever obtained by the Department of Justice from a nursing home company.

Filed in 2012, the suit indicted Life Care of repeatedly submitting fraudulent claims for rehabilitation therapy to Medicare and TRICARE, the health insurance program for the military, throughout a seven-year period.  It accused the company of establishing unethical corporate policies that promoted the administration of unnecessary treatment and retaining patients for inappropriately long periods of time to boost revenues.  In an additional suit filed in May, Preston was accused by the government of unjustly profiting from the scheme.  The settlement concludes both cases.

Although Preston has agreed to the settlement, he continues to deny of any wrongdoing: “We deny in the strongest possible terms that Life Care engaged in any illegal or improper conduct. We are, however, pleased to finally put this matter behind us, without any admission of wrongdoing.”

Preston and Life Care have agreed to pay $45 million of the settlement amount up front and the remaining charges over a span of three years.  They have also agreed to enter a five-year corporate integrity agreement with the Office of Inspector General of the Health and Human Services Department, which will mandate yearly independent review of whether the therapy services Life Care bills Medicare are legitimately needed and appropriate.

In a press release, Justice Department’s civil division head, Benjamin Mizer, said, “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.”

The government’s litigation was initiated due to whistleblower complaints from Tammie Taylor and Glenda Martin. These two former Life Care employees filed their complaints under the False Claims Act in 2008 and will be awarded $29 million from the settlement.

Life Care was founded in 1970 and is based in Cleveland, Tennessee.  The chain operates over 200 skilled nursing and assisted living facilities across America.  According to Forbes, Preston, who is the only owner of the privately held company, has a net worth of an estimated $1.4 billion.

If you or a loved one is or has been a resident at an assisted living or skilled nursing facility and is a victim of elder abuse and neglect, please contact the Law Offices of Ben Yeroushalmi. Mr. Yeroushalmi and his team of associate attorneys and experts are highly experienced in elder law and are passionate about defending the rights of the elderly. We believe that nursing homes and assisted living facilities are responsible for providing the best quality of care to their residents.  If a long-term care facility, such as one in Lomita or Long Beach, California, has failed to consistently provide you with quality care, contact our office today for a free consultation.