CBS Investigates Life Care Centers’ Alleged Medicare Fraud

| May 12, 2013

Former Life Care Centers of America employees are speaking out against the company, which is currently under federal scrutiny amid allegations it has been overbilling Medicare millions of dollars each year for unnecessary or excessive therapy, reports CBS This Morning (CTM).

With more than 30,000 beds, Life Care Centers is the nation’s third-largest nursing home chain and was paid $4.2 billion in Medicare reimbursements between 2006 and 2011. 

A CTM investigator spoke with a few former employees who claim the company is giving patients rehab they don’t need, and billing the government for money they’re not entitled to receive.

Helen Toomey, a former assistant manager and speech therapist at one of Life Care’s Massachusetts facilities, estimates that around 40% of the therapy she was ordered to provide toward the end of her tenure at the company was unnecessary or “not reasonable” under Medicare guidelines. 

Toomey ultimately resigned—but took with her a communications notebook with patient notes that she has shared with the FBI. 

Entries in the notebook show how Life Care Centers wouldn’t let patients get discharged, according to Toomey, so Medicare billing could continue. 

The Justice Department is suing the company, which billed nearly 68% of its Medicare patient days at the highest rate possible—almost double the national average of 35% of patient days—according to a report from the Office of the Inspector General. 

That report also revealed that nearly a quarter of all Medicare payments made to nursing homes are made in error, costing taxpayers $1.5 billion a year.

The problem, says CBS This Morning, is that Medicare rarely checks to make sure care is necessary.

Regional inspector general Jody Nudelman described this practice of unchecked fraudulent billing a “growing problem,” as Medicare has yet to take significant action.

“It’s all of us that are paying the cost,” she told CBS. “Until you create incentives to bill for the right care and not for the most care, the problem will continue.” 

For its part, Life Care denies the allegations. 

“Life Care strongly disagrees with the allegations and will vigorously defend its therapy programs…[Our own analysis] indicates that Life Care’s practices have resulted in significant savings to the Medicare program…This lawsuit’s allegations second guess, after-the-fact, the trained medical professionals who prescribed the level of care provided to Medicare beneficiaries.”

View the segment.

Written by Alyssa Gerace


Companies:

Category: Management & Operators, Medicare and Medicaid, Senior Care

Comments (22)

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  1. walter says:

    Costing the taxpayers 1.5 million plus and they made 4 billion, Do you all realize they gave employees a 1% raise , for most of the that is not even the cost of a coffee , once a month !! While the managers sit behind closed doors and feast on catered food ..

    • Disgruntled says:

      You are so right! And they are so "trigger happy" that they are quick to fire the direct care staff while management sits in the conference room eating all day.

  2. Ksherwd says:

    Seriously spoken by obviously lower tiered employees. Healthcare managers don't sit on their butts eating Bon bons all day. Whose license is on the line? Not yours! And that raise, no one gets one! Don't blame your managers, blame your owners!

  3. manny says:

    life care only cares about money,not patients by any means, and then they tell you to pray…………….

  4. Tiger says:

    While NO Long Term Care company is perfect, I have found over my years experience working for Life Care, that my team of managers do care about the residents and we have many RECORDS to PROVE the REHAB DOES WORK…testimonials…writings to LCCA.AND NO, WE DONT SIT BEHIND CLOSED DOORS. As a manager we audit our floor staff for quality, and help those who dont really want to help the GERIATRIC population move on to other places.

    • Elizabeth,PTA says:

      no company is perfect I will agree but more and more are the same. Sure rehab works but the allegations made in this claim are more of the norm and they do need to stop. Clinical responsibility should be up to us ..the therapist and it is not. As a manager I find it offensive you audit the floor staff ..what you mean is you review the notes to make sure they contain "skilled" wording ..big deal we can get technical and say medicare says you can't count rest periods or trips to the bathroom as treatment time and sitting with a patient filling out a progress note for 10 minutes isn't a skill either. I have to say Ultra High patients in a SNF are few and far between ..legit ones anyway ..how dare you say we don't want to help the Geriatric population ..we are not profit driven like the managers that receive bonuses from high RUG categories and staff productivity. We actually believe what is clinically appropriate is what should be done. It's people like you actually that have no respect for therapy and OIG pretty much laid it out in their report of the over spending.

  5. Guest says:

    Please… billing 300.00 a day for skilled rehab on a 101 year old patient that hasnt walked in 6 years, 5 days a week for 6 weeks, then discharge them for not making progress and they are no better off then when they started. Everyone knows Medicare patients are a cash crop and that is what the healthcare business is all about. Some facility employees have not recieved a raise in years, like the CNA's. They are paid so bad that they cant afford the health insurance and are on Medicaid! Top heavy organization and top pay to everyone except front line staff and understaffing is a common problem, hence the low ratings on yearly surveys from the state. Most people taking care of patients are caring but quickly become disillusioned because of the lack of supplies and things that are important to patients that they facilities need to pony up to. The record profits are not put into providing good patient care, or even retaining good staff that provides that care. It goes directly to Forest Preston and his family, kind of like the Walmart effect.

  6. roger potts says:

    As a Nurse and in a management position at Life Care, I can tell you that in the 14 years I have worked for the company, we here are dedicated to the residents wellbeing as we are responsible for the residents safety and comfort. I will say that as far as pay, ALL nurses and aides are way underpaid for the work we do, compaired to what we pay,say a plummer, for working on the pipes in our bathroom, but we are taking care of the PEOPLE you love(we hope) and are expected to do this with a smile on our faces and a song in our hearts with very little pay and benefits. this is not a Life Care problem , but a problem with the entire system. when we put as much in the care of the elderly, the same group of people who payed for this country and made it what it is today, as we do say a juicing ball player, then no matter where you work for the elderly, you can expect this to continue and to only get worse with the babyboomers heading to the nursing homes. WAKE UP and notify your goverment officials and let them know we need to change the system.

  7. Don Glen says:

    I have a clear copy of my 90 year old wife's Living Will, and stacks of Medicare Physical Therapy Bills, Hospital Bills for falls and two years of Medication bills. Believe me I have talked to a lot of lawyers on this matter and no one really cares. I'm talking $l50,000 in Medicare and Medicaid Fraud. for just one patient. My wife entered the nursing home with advanced Alzheimers and other ailments with a request for no more medication. So much for a Living Wills. Now it's all American Greed!

  8. Walter says:

    Walmart effect if you don't like your wages get out! Thanks Life Care corp, we worked hard, some people abused overtime hours and all hours were cut . How can you cut hours in a nursing facility , glad I left your building , Embarrassed to work there! Life care was fraudulent in Medicare and have BIG attorney fees .. so they cut all hours in all facilities shame shame .. What if your Mother was in Life Care with ALzheimers and she was short changed in care if you want your company to prosper than maybe you better rethink how to market and make a difference

  9. cody248 says:

    A blast from the past…..what a horrible company Life Care was to work for. Many people at the local level are hard working honest and good people. The owner and upper tier management do not care about our elderly. The lawsuit in the works now will take years to settle….and every day our seniors are being treated like dollar signs. I hope you all get what you deserve!

  10. loving mother says:

    I have worked for Life care for 10 years and I can assure you that "we" love our residents and take very excellent care of them. Yes. We can be short on staff at times, but our "Life Care Family" always becomes a team and the residents always come first. Yes…we all need raises, but those who are loyal to our residents stay…because it is the christian thing to do. We really do care.

  11. Guest says:

    Life care centers are not as bad as some other contract therapy companies; such as Therapy resources mgmt. (TRM). They would expect a therapist to sit w/a patient for 4-6 hrs & hold their hand. Then write a fancy-skilled note (creative documentation just to get the money. I am a PTA at Life Care centers & I love my job, taking care of people in general helping them become as functionally independent as possible. There is a lack of integrity in nursing homes. I prefer one on one therapy sessions because I believe that a true, good quality therapist should always give there whole divided attention & have a tremendous amount of patience. Most therapists do not have the skills necessary to help patients attain their best ability to function until their last days. It really bothers me that I see many co-workers, & former co-workers who commit perjury because they either are afraid of being fired or are selfish.

  12. Wow!!! says:

    Direct email from a VP at Life Care to its Executive Directors, "As each of you are fully aware we as a division continue to struggle with census development and operational success. In times like these one would expect that our work force would pull together and place more emphasis and energy on the issues that are holding us back. What is interesting is that while you would think our efforts would be "beefed" up to increase our census, just the opposite seems to be occurring."

    "On Friday between 4:45pm and 5:10pm, eight facilities throughout the division that are struggling with census were contacted and not one Executive Director was at the facility, and only one admissions department was available to take the call. We all know that hospitals like to discharge on Fridays and over the weekend, but if a facilities routine is to close up shop around 4pm, then just think of all the past opportunities we may have missed. If this is the routine, then every referral source is fully aware of our practice and they won't even attempt to make the call."

    " I would highly suggest that you re-strategize your operational plan immediately."

  13. Colorado ED says:

    As a past ED for Life Care, I can attest to the greed and push for higher RUG rates. I attended several training sessions with my MDS and RSM being "educated" to slide the window to achieve the "highest rate possible" and to "make those extra minutes" to achieve the same increased rates. I even warned an MDS associate to "never violate my trust in you", but the VP's had more influence and assured her they were right and I was wrong. Shortly after my questioning the ethical practice of "treating the RUG instead of the patient" I was terminated. A couple of months later, the news broke on this FRAUD and now the nation knows!

  14. Pissed off son says:

    Over billing and billing for services never provided is one thing.
    Letting people lay in their own waste for hours is criminal and inhumane.
    I placed my mother in one of their facilities and I feel as if I left her alone in the woods.
    I would not take a wounded dog I found on the road to one of their facilities.

    I hope Hell has plenty of beds in its skilled nursing facility for all of those who
    either get paid to provide care for the elderly and disabled and don't do their job and the management that oversees such facilities. If you show up loyally and perform your
    job then my comments should not offend you.

  15. PT Who Cares says:

    I have worked as a PT for several decades in many SNF's (as well as other settings) and this is most definitely a hard time we are in. I had considered Life Care to be one of the better ones and was surprised to see this news.

    There is an amazing amount of pressure in many SNF's for therapists to meet productivity standards that could never be met ethically (95% ????). Others make wonderful offers of generous vacation time that they rarely ever allow their employees to actually take. Then refuse to pay out when the employee leaves (that's a whole other lawsuit). Just in the last year I have worked at a building that was completely deteriorating and rain poured in through the ceiling, on top of us as we worked, interspersed with sewage backing up into the basement periodically. I have been sexually harassed by managers and co-workers (OMG did we not put that to rest 30 years ago with the sexual harassment laws?). And the list goes on. It has been a disheartening year and I am still in search of a good solid place to work that continues to behave with integrity no matter what.

    It was about 1999 when healthcare went through sweeping changes that ended up closing hospitals, OP clinics and SNF's. I predict we headed for more of the same. And change can be a good way to purge situations that are not working. I am just hoping that the good guys are left standing when it is all over.

  16. Guest says:

    I have worked in healthcare for the last twelve years. I worked for Life Care for six. It is a human business. It cannot be graded in the same manner as retail or other industries. Nursing homes have more oversight and regulations than any other arena except nuclear power plants. We have the same fallacies as any group of people. There is greed, there is avarice, there is poor decision making. However, there is also true empathy, sacrifice, and love. Working in a nursing home is one of the toughest jobs most people will ever do.

  17. Guest says:

    The physical demands can be strenuous, the emotional demands can be overwhelming. I worked for the Department of Defense for 15 years. I am a combat veteran. This is tougher. The daily toll of working with the mentally ill, the terminally ill, and the sad and desperate is tough. But it is a calling, make no mistake. Those that do this job well and ensure that the staff they manage and support does their best every day as well do it because they love it. No one is getting rich working in a nursing home, except in the best and most important way possible. Our lives are enriched.

  18. Guest says:

    The "system" is vast and complicated with almost innurmerable variances. There will be sweeping changes, they are already starting. But the bottom line is always people. You want to know how a building runs? You go straight to the Administrator and you look him or her in the eye and you get your homework done and you ask them the hard questions before you even place your loved one there. Too many people trust that it will all just be taken care of. That nursing homes are somehow connected to welfare programs because they take Medicaid and Medicare. That you just drop someone off and your responsibility is over. If you want your loved one to get the best care then you have to be part of the team that provides it. Work with management, work with the floor staff, take advantage of Family Nights and Alzheimer's Meetings or whatever else programs the facility is offering and listen. There are great facilities out there but it's not because of a company motto or philosphy or business model. It's because of the people that work there, in all positions.

    • MissStinky says:

      My father lives next door in one of their assisted living facilities. Occasionally he jokes with me asserting that the Live Care Center next door is selling body parts on the black market. After reading this article I'm beginning to wonder if the old guy isn't on to something.

  19. arose says:

    Tell me how a facility with an average daily census of 70 (one-third of which are long term residents and not receiving part A therapy) can support a therapy staff of 40 therapists without fraud? Why are the nursing departments so understaffed? Because nurses don't generate top tier revenue. The *worst* thing the government did for Medicare was listing therapies as the top tier acuity for reimbursement. Fraud, Life Care. I hope you go out of business.