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December 6, 2012

Government joins whistleblower suit alleging Life Care Centers falsely billed Medicare/TRICARE for ultra high levels of therapy services

By Susan L. Smith JD, MA

The government has intervened in a qui tam action alleging that since 2006 Life Care Centers of America (Life Care) a nursing home operator, submitted false claims to the Medicare and TRICARE programs for medically unreasonable, unnecessary, and unskilled therapy services and used false records and statement to support the claims resulting in the Medicare and TRICARE programs paying millions of dollars for services that were not covered under the skilled nursing facility (SNF) benefit. The federal investigation began in 2008 after two whistleblower lawsuits were filed by former employees Glenda Martin, a registered nurse, employed by Life Care in Morristown, Tennessee, and Tammie Taylor, an occupational therapist, who was employed in Lauderhill, Florida.

The allegations. Life Care, which operates more than 200 facilities in 28 states, was paid $4.2 billion between 2006 and 2011 by Medicare. The complaint alleges that Life Care engaged in a systematic scheme to maximize the number of days it billed to Medicare and TRICARE at the ultra high level of skilled rehabilitation therapy, which consists of a minimum of 720 minutes per week of skilled therapy from at least two therapy disciplines (physical, occupational, and speech) and is intended for the most clinically complex patients. Life Care allegedly set aggressive ultra high-related targets that were completely unrelated to its beneficiaries' actual conditions, diagnoses, or needs. It then reinforced those targets at corporate meetings and presentations, through employee performance evaluations and imposing action plans on underperforming facilities, according to the complaint. As a result of Life Care's corporate pressure to maximize its billings, Life Care therapists provided Medicare and TRICARE beneficiaries with excessive amount of therapy that was not medically necessary. Further, therapists routinely provided generic, non-individualized services that did not benefit the beneficiaries. Life Care allegedly succeeded in significantly increasing the number of days it billed at the ultra high level and in inflating the money it received from Medicare and TRICARE. The government claims that in 2008, Life Care billed nearly 68 percent of it s Medicare rehabilitation days at the ultra high level far exceeding the average of 35 percent among all SNFS during the same year.

The complaint includes allegations that top level managers and supervisors issued directives to provide ultra high level services to maximize Medicare reimbursement and rewarded facilities that billed at this level.

Life care's response. Life Care issued a letter in response to the government's suit stating that it "disagrees with the allegations and will vigorously defend its therapy programs and the care provided by the medical professionals involved." Life Care contends that its therapy programs improve patients' conditions and quality of life and its practices have resulted in significant savings to the Medicare program, potentially $400 million for the time period 2006-2010.

According to Life Care's analysis, high-intensity therapy allows patients to reach their clinical goals and be discharged from the nursing facilities more quickly than if the patients had not received this therapy, which ultimately reduces Medicare spending. Life Care stated that licensed "independent physicians order therapy services according to individualized treatment plans created for each patient in consultation with a patient's physical, occupational, and/or speech therapists.

MainStory: TopStory ComplianceNews FCANews FraudNews SNFNews

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