Justice Department Investigates Life Care Centers for Aggressive Medicare Overbilling

A Tennessee-based nursing-care company is under investigation for defrauding Medicare of millions of dollars in unnecessary treatments, according to a federal complaint

The U.S. Government filed this complaint against Life Care Centers of America, Inc. to recover millions of dollars that Life Care allegedly billed Medicare and TRICARE programs to pay for services not covered by the skilled nursing facility benefit. It is also believed that Life Care pressured therapists to perform expensive, unnecessary treatments to unfitting patients. 

From at least 2006 to the present, Life Care engaged in a systematic scheme to maximize the number of days it billed to Medicare and TRICARE at the “ultra high” level, according to the complaint.


Ultra high therapy is billed at a higher level and includes physical, occupational, and speech therapies.

Life Care accomplished its fraud scheme by providing false records and statements to charge the government for its most expensive therapies, punishing facilities and employees that failed to meet its ultra high targets and applauding those that cooperated in the fraud, according to the complaint.

By 2008 the company was billing 68% of its Medicare rehabilitation days at the ultra high level—far beyond the national average of 35% among all skilled nursing facilities during that same year.


The complaint comes a month after the Office of the Inspector General of the U.S. Department of Health and Human Services reported that Medicare loses roughly $1.5 billion each year from fraudulent over-billing. 

Written by Jason Oliva 

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