Columbia medical facility among those listed in massive fraud settlement

$145 million Life Care Centers of America settlement with Justice Department is largest ever among skilled-nursing chains

In what is being called the largest-ever settlement of its kind, Life Care Centers of America and its owner have agreed to pay the federal government $145 million to settle lawsuits alleging the company imperiled patients and fleeced the government and taxpayers through bogus billings to Medicare and its military equivalent, known as TRICARE.

The Tennessee-based company owns four skilled-nursing and rehabilitative facilities in South Carolina, including Life Care Center of Columbia near Fort Jackson. It also has two facilities in North Charleston and one on Hilton Head Island.

Photography by Life Care Media Center

Photo by Life Care Media Center

The Columbia facility features prominently in the original Nov. 28, 2012, suit against the company and its leader Forrest L. Preston, who owns more than 220 facilities nationwide.

The federal government’s lawsuit mentions the Columbia facility at least two times in laying out examples of excessive and potentially harmful therapy, as well as medically unreasonable and unnecessary services.

It also spotlighted the Columbia center in a section citing complaints among employees system-wide about hitting “corporate targets” and pressure to inflate billable time to increase profits.

The Columbia center offers at least 48 different physical, occupational and speech therapy services, including Alzheimer’s care, on an inpatient and outpatient basis.

A statement on the facility’s website reads: “Our facility strives to provide the best care possible for our residents and patients so they can meet their goals and thrive.”

Attempts to reach the Columbia center’s executive director by phone Monday evening were unsuccessful. An operator at the facility declined to provide Cola Daily with an after-hours phone number or to pass along a message to the director seeking her comments on the settlement agreement, as well as the allegations against the center and its parent company.

In the announcement Monday by the Justice Department, Life Care and Preston agreed to settle complaints the company allegedly violated the federal False Claims Act “by knowingly causing skilled nursing facilities to submit false claims to Medicare and TRICARE for rehabilitation therapy services that were not reasonable, necessary or skilled.”

“This resolution is the largest settlement with a skilled-nursing facility chain in the department’s history,” said Principal Deputy Assistant Attorney General Benjamin C. Mizer, head of the Justice Department’s Civil Division.

“It is critically important that we protect the integrity of government healthcare programs by ensuring that services are provided based on clinical rather than financial considerations,” he added.

Claims against the company were originally alleged in whistle-blower lawsuits by former Life Care employees Tammie Taylor and Glenda Martin, and later joined by the federal government. The two whistle-blowers, the government said, stand to earn a combined $29 million reward under the settlement agreement.

The suits alleged that between Jan. 1, 2006 and Feb. 28, 2013, Life Care submitted false claims for rehabilitation therapy by “engaging in a systematic effort to increase its Medicare and TRICARE billings.”

Medicare reimburses skilled-nursing facilities at a daily rate that reflects the skilled-therapy and nursing needs of their qualifying patients. The greater the skilled therapy and nursing needs of the patient, the higher the level of Medicare reimbursement.

The highest level of Medicare reimbursement for skilled nursing facilities is for “Ultra High” patients who require a minimum of 720 minutes of skilled therapy from two therapy disciplines, such as physical, occupational, or speech, one of which has to be provided five days a week.

The government alleged in its complaint that Life Care instituted corporate-wide policies and practices designed to place as many beneficiaries in the Ultra High reimbursement level regardless of the clinical needs of the patients, resulting in the provision of unreasonable and unnecessary therapy.

“Life Care also sought to keep patients longer than was necessary in order to continue billing for rehabilitation therapy, even after the treating therapists felt that therapy should be discontinued,” stated the Justice Department’s announcement.

“Life Care carefully tracked the minutes of therapy provided to each patient and number of days in therapy to ensure that as many patients as possible were at the highest level of reimbursement for the longest possible period.”

In one example from Columbia, the suit alleged that “from March 7, 2006, to March 27, 2006, Life Care billed at the Ultra High level for Patient C, an extremely frail 80-year-old resident of Life Care Center of Columbia in South Carolina.

“Although the physical therapist’s notes indicated that on March 21, 2006, Patient C was ‘very lethargic, hard to arouse, and unable to participate successfully in treatment’,” Life Care recorded 35 minutes of physical therapy that day. The next day, Patient C was placed in a standing frame (a piece of equipment used by therapists to secure a patient in a standing position and support those areas where the patient is too weak to support oneself) despite the fact that the patient required assistance to control their head and to open their eyes.

“Both the physical and occupational 33 therapist recorded providing 42 minutes each for the time Patient C spent in the standing frame. Patient C died five days later,” the lawsuit read.

In another example from Columbia highlighting “medically unreasonable and unnecessary services,” the lawsuit read: “Patient I was a 62-year-old male resident at Life Care Center of Columbia in South Carolina from April until July 2007. Patient I’s 5-day, 14-day, and 30-day Minimum Data Sets indicated that he did not walk and was totally dependent (i.e., required the assistance of at least two people) for bed mobility, transfers, toilet use, and bathing.

“The physical therapy evaluation noted that Patient I required the maximum level of assistance to move from lying down on his back to sitting upright and then moving from a sitting position to lying down on his back.

“Nevertheless, Life Care billed Medicare for group therapy focused on standing exercises in which Patient I could not reasonably be expected to participate in or receive any benefit from. Life Care billed Medicare for Ultra High therapy from April 25, 2007, until June 23, 2007.”

The settlement also resolved allegations brought in a separate lawsuit by the federal government that Forrest L. Preston, as the sole shareholder of Life Care, “was unjustly enriched by Life Care’s fraudulent scheme.”

“Billing federal healthcare programs for medically unnecessary rehabilitation services not only undermines the viability of those programs, it exploits our most vulnerable citizens,” stated U.S. Attorney Nancy Stallard Harr of the Eastern District of Tennessee, where the suit was filed.

“The resolution announced today demonstrates the commitment of the U.S. Attorney’s Office to aggressively pursue providers who utilize fraudulent practices to knowingly put their own financial self-interest over a duty to patients,” said U.S. Attorney Wifredo A. Ferrer of the Southern District of Florida.

As part of the settlement, Life Care also will enter into a five-year chain-wide Corporate Integrity Agreement with the Department of Health and Human Services Office of Inspector General that requires an independent-review organization to annually assess the medical necessity and appropriateness of therapy services billed to Medicare.

“Therapy provided in skilled nursing facilities must be medically reasonable and necessary, and we will continue to vigorously investigate companies that subject their residents to needless and unreasonable therapy,” stated HHS Inspector General Daniel R. Levinson.

Since January 2009, the Justice Department has recovered a total of more than $31.6 billion through False Claims Act cases, with more than $19.2 billion of that amount recovered in cases involving fraud against federal healthcare programs.