Settlement near in Government’s $1.8 billion against LifeCare Medicare fraud case

A settlement may be close in the federal government’s closely watched False Claims Act case against Cleveland, Tn.-based Life Care Centers of America. Attorneys have asked Chattanooga Federal Judge Sandy Mattice to put a 30-day hold on depositions, saying a settlement is in the works. Judge Mattice granted the motion.The government says claims in the case amount to $1.8 billion.

The investigation was launched in 2006 – charging that Life Care employees were encouraged to utilize excessively high levels of therapy to maximize Medicare payments.

The government has separately sued Life Care Centers of America founder and still-chairman Forrest Preston, saying he was “unjustly enriched” by millions of dollars in allegedly unfounded claims for government reimbursement.

A similar case was settled against RehabCare/Kindred in January of this year for the same alleged behavior of presumptively settling therapy schedules for patients at skilled nursing facilities at the “Ultra High” RUGS levels instead of setting schedules that would best serve the patient needs. The excessive invoicing of Medicare cost the Government millions. The LifeCare case has been in intensive litigation for over two years and has already set various legal precedents including a major decision by the Court allowing for proof of cases through the use of statistical sampling. It is considered one of the most closely watched cases in the nation because so many of the rehabilitation companies are engaged in the same practices alleged by the Government in the LifeCare case.

Jeffrey Newman, who represents whistleblowers, represented the two whistleblowers in the Kindred RehabCare case noted above. He is presently counsel to whistleblowers in several similar cases in different states.