August 24, 2015

Feds allege CEO benefited from overbilling Medicare for patient rehabilitation

Businessman Hiding Face Behind Sign Whistle BlowerForrest Preston, the founder and CEO of Life Care, is personally facing a count of unjust enrichment in a False Claims Act whistleblower lawsuit. Federal prosecutors allege Preston profited from the overbilling patients at Life Care nursing home centers nationwide.

The lawsuit alleges Life Care nursing homes frequently ignored the recommendations of its in-house physicians, delaying and extending treatment for patients in order to collect more Medicare and Tricare reimbursement. According to the whistleblower lawsuit, Life Care set unrealistic rehabilitation goals for patients and provided medically unnecessary treatment.

Filings in the case show that in 2008, Life Care billed 68 percent of the days patient spent in rehabilitation at Medicare’s most expensive rate. The national average for the same practice was 35 percent.

Prosecutors allege the overbilling practices took place at the behest of top Life Care officials. Employees and facilities at Life Care would face discipline for failing to meet the company’s overbilling goals, according to the suit.

There are more than 260 Life Care nursing home facilities across the country, employing over 42,000 people and generating $2 billion in revenue. Preston founded Life Care in the 1970s and is its CEO, chairman, and sole shareholder.

The False Claims Act against Life Care was first filed in 2008 when two Life Care employees filed separate qui tam whistleblower lawsuits against the company. The two cases were consolidated into one lawsuit. Preston was personally named in the False Claims Act lawsuit after prosecutors uncovered his role in the alleged fraud during the discovery phase of the case.

While The Cochran Firm, D.C. does not represent any of the parties in this False Claims Act lawsuit against Preston and Life Care, our law firm provides legal representation to whistleblowers with inside knowledge of fraud perpetrated against federal programs that defraud taxpayers. Whistleblowers who successfully prosecute False Claims Act lawsuits are eligible to receive between 15% to 30% of money recovered, depending on the circumstances of the case.

If you believe you have important knowledge related to fraud, waste, or abuse of federal programs or grants, contact a qui tam False Claims Act whistleblower attorney at The Cochran Firm, D.C. Call us at 202-682-5800 or fill out an online contact form for a free case review.