U.S. Eastern District Judge Harry S. Mattice ordered federal prosecutors on Friday to unseal the case filed Oct. 16, 2008.
Federal prosecutors are seeking actual damages to be determined at a trial to be set later. Life Care is charged with five counts including violation of the False Claims Act and for unjust enrichment by retaining monies to which it was not entitled.
An open letter to Life Care employees and medical professionals stated the lawsuit appears to be the latest attempt by the federal government to target companies that provide rehabilitation therapy services in the skilled nursing setting.
“The government is engaging in aggressive efforts to restrict health care costs, which in principle is a noble goal. However, instead of using administrative procedures established for this purpose, the government is relying upon procedural shortcuts and escalating policy disagreements to allegations of fraud,” the open letter stated.
Life Care Centers of America President Beecher Hunter referred questions this morning to the open letter posted Friday on the opening page of the company website.
Former Life Care employee Glenda Martin worked at Life Care Heritage Center in Morristown from 1993 through 2007 and as interim director of nursing at various other Life Care facilities. Through her employment, she gained first-hand knowledge of company practices, according to the original complaint.
“According to the allegations, Life Care provided more rehabilitation therapy than was necessary,” the corporate letter continued. “Contrary to the government’s allegations, Life Care’s therapy programs improve patients’ conditions and their quality of life. This belief is supported by medical literature, studies and Life Care’s first-hand experience in observing the progress of patients who receive high-intensity therapy.”
According to court documents, the suit alleges Life Care was able to control the type and amount of therapy provided patients. Patients generally arrive at a health care facility with a generic note from a physician indicating the patient is to be evaluated for physical, occupational or speech therapy. Life Care personnel prepared therapy plans that were submitted to a physician who, in most cases, was the medical director of the facility.
“Life Care stated that based on data and information from its skilled nursing facilities where high-intensity therapy is provided to patients, Life Care also believes that such therapy actually saves the government money,” the open letter stated. “Life Care’s analysis reveals that high-intensity therapy allows patients to reach their clinical goals and to be discharged from the nursing facilities more quickly than if the patients had not received this therapy, which ultimately reduces Medicare spending. Life Care’s analysis of publicly available information regarding lengths of stay and corresponding payment information indicates that Life Care’s practices have resulted in significant savings to the Medicare program — potentially $400 million for the time period 2006-10.
Prosecutors allege corporate pressure was placed on staff. Also, Life Care often falsely documented treatment in order to justify higher reimbursement and in other instances, therapy was given to patients though they received no benefit from therapy, prosecutors stated.
In response to the lawsuit, Life Care stated it is a case of “second guessing, after-the-fact, the trained medical professionals who prescribed the level of care provided to Medicare beneficiaries. Indeed, 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. These independent physicians and therapists all are duly licensed by the state and are bound by ethical obligations. Life Care supports the decisions made by these professionals and stands by the care it has provided to residents.”