Life Care Centers, feds settle False Claims Act statistical sampling case

The settlement is slated to be finalized by Oct. 31, the brief said
The settlement is slated to be finalized by Oct. 31, the brief said

A high-profile court case involving one of the nation's largest skilled nursing providers and the controversial topic of statistical sampling will end in a settlement, according to a brief filed Thursday.

The case stems from a False Claims Act lawsuit against Life Care Centers of America, which was accused of providing unnecessary therapy services to maximize reimbursements. The government intervened in the case in 2012, and proposed using a sample of 400 Medicare claims from Life Care Centers facilities to show that the inflated therapy claims occurred throughout the company.

A lower court issued a ruling in the case in 2014 that said the government could use statistical sampling to help prove their charges; a final decision in the case could have “set the stage for a dramatic change in the landscape of litigating,” Law360 reported after the lower court's decision.

Instead of a final decision the Life Care Centers case will end in a settlement, expected to be finalized by Oct. 31, 2016. The settlement will resolve the allegations against Life Care Centers and a related action against CEO Forrest Preston, according to the jointly filed brief.

The only part of the settlement process left to finalize is a corporate integrity agreement between Life Care Centers and the Department of Health and Human Services' Office of Inspector General, the brief said. Drafts of that agreement have been created; both parties anticipate the agreement can be finalized by Oct. 31.

A spokeswoman for Life Care Centers declined to comment Thursday. The terms of the settlement were not disclosed in the filing.

Long-term care providers bashed the use of statistical sampling in an amicus brief filed for a separate court case in March, calling it a “giant sledgehammer” and a “novel shortcut” that would force defendants to settle cases pre-trial.