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$145M Nursing Home Settlement for Medically Unnecessary Rehab Services

A national nursing home chain with dozens of locations in Florida (including in Orlando) has agreed to pay $145 million to resolve a government lawsuit alleging the company violated the federal False Claims Act by intentionally causing its facilities to submit claims to Medicare and Tricare for rehab services that were not:

  • Reasonable;
  • Skilled;
  • Necessary. 

The chain, Life Care Centers of America, Inc. is based in Tennessee and owns/ operates more than 220 nursing homes across the U.S. Its Florida facilities are listed here. Cases like this matter to patients not just because they involve defrauding taxpayers of federal money, but because vulnerable, elderly residents often end up receiving therapy they do not need and that, in some cases, is harmful.

This $145 million settlement is the largest the U.S. Department of Justice has ever made with a skilled nursing home facility, according to a recent press release

The alleged scheme is similar to what we saw with the recent Wells Fargo bank scandal, in which bank employees were put under enormous pressure to meet unrealistic sales goals, driving a huge number of them to unwittingly sign up customers for new accounts they never asked for or approved. However in this case, these weren’t new accounts but rehabilitative therapies and treatments.

The Department of Justice alleges that the firm’s corporate office imposed heavy pressure on employees to meet a number of sales goals that weren’t realistic. Between 2006 and 2013, the company reportedly paid no mind to the recommendations of the therapists it hired, instead choosing to set therapy goals based on services that were most profitable, instead of what patients actually needed based on their physical condition.

Among one of the complaints highlighted by the DOJ, some who were confined to their beds or chairs with no prospect of walking were forced into physical therapy. In a lot of these cases, the patients had significant cognitive impairments, so they were unable to understand what was happening, make sense of their surroundings or tell someone if they were in pain. These therapies were forced in such a way that residents were in some cases dragged down the hall, and then there would be documentation that the patient “walked.” Even worse, patients would become confused with this false sense of being able to walk on their own – which they would then sometimes try to do – and end up falling, in some cases suffering severe injuries.

Two former employees blew the whistle on the company, each filing lawsuits in which the U.S. government later intervened (called a qui tam lawsuit). For their part in the case, those two former workers will receive $29 million of the award.

Meanwhile the owner of the company, who was also named in the lawsuit for unjust enrichment from the scheme, has also settled his claim as part of the $145 million payout. In agreeing to the settlement, neither the company nor the owner conceded liability. It’s not clear exactly how much money these facilities improperly received, but we do know the $145 million figure is based on how much the company was actually able to pay.

Nursing home residents (or loved ones of those residents) who may be wondering whether a loved one was harmed by unnecessary treatments should speak with an experienced nursing home abuse attorney in Orlando.

Call Freeman Injury Law — 1-800-561-7777 for a free appointment to discuss your rights. Now serving Orlando, West Palm Beach, Port St. Lucie and Fort Lauderdale.

Additional Resources:

Life Care Centers of America Inc. Agrees to Pay $145 Million to Resolve False Claims Act Allegations Relating to the Provision of Medically Unnecessary Rehabilitation Therapy Services, Oct. 24, 2016, U.S. Department of Justice

More Blog Entries:

$2M Nursing Home Neglect Settlement Involves Claims of Failure to Provide Marketed Services, Nov. 11, 2016, Orlando Nursing Home Abuse Lawyer Blog

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