Life Care Centers of America pays $145 million to end fight

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LCCA founder and CEO Forrest Preston denied all allegations.
LCCA founder and CEO Forrest Preston denied all allegations.

The nation's fourth-largest skilled nursing provider has agreed to pay a record-setting $145 million to settle allegations that it inflated its therapy claims, the Department of Justice announced in late October.

The settlement with Cleveland, TN-based Life Care Centers of America marks the “largest settlement with a skilled nursing facility chain in the department's history,” said Deputy Assistant Attorney General Benjamin Mizer. It was first revealed in September in a brief filed before the deal had been finalized.

The agreement will resolve claims that Life Care Centers implemented company-wide policies between 2006 and 2013 to push residents into the Ultra High therapy reimbursement level, regardless of their actual clinical needs. 

“Life Care made a major miscalculation with its nationwide Medicare reimbursement policy,” said attorney Anthony C. Vitale, who represented a former occupational therapist who brought the overbilling allegations against LCCA.

In a statement to McKnight's, Life Care Centers said it has “strongly disagreed with the allegations,” and believes that it was entitled to payment for services rendered. The settlement also will resolve allegations brought in a separate lawsuit against Life Care Centers' founder and CEO Forrest Preston.

“We deny in the strongest possible terms that Life Care engaged in any illegal or improper conduct,” Preston said in the statement. “We are, however, pleased to finally put this matter behind us, without any admission of wrongdoing.”

Life Care Centers also entered a five-year corporate integrity agreement as part of the deal, which will require an outside organization to assess the medical necessity of the therapy services the company bills to Medicare.