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Nursing Home Corporations Sued for Medicare Fraud and Greed

By December 3, 2012 No Comments

Documents unsealed in federal court this past Friday give details of a federal investigation into allegations of Medicare fraud at Cleveland-based Life Care Centers of America, according to media reports.  Medicare paid $4.2 billion to Life Care between 2006 and 2011. According to court records, prosecutors accuse Life Care supervisors of directing workers to “max out” unnecessary therapies for patients in order to get higher reimbursement from Medicare. The records show a federal probe began in 2008 after two whistle-blower lawsuits were filed against the company.

Media reports also report on another recently filed law suit, which alleges that state regulators allow nursing home companies to siphon money away from patient care to pad corporate profits. The suit targets Country Villa Health Services, which runs a chain of 50 skilled nursing and assisted-living facilities. The case attacks the industry’s business model. At issue are state-approved agreements in which Country Villa homes contract out their operations to another Country Villa entity.

The management company gets a percentage of revenues from the homes it operates. The companies that collect the management fees aren’t focused on improving patient care at nursing homes, said Charlene Harrington, UC San Francisco professor emerita of nursing and sociology. They monitor the homes mainly to cut costs and maximize revenue, she said. “I think it’s a serious problem because they spend so little on the actual care,” she said. “They’re grossly understaffed, so the care is terrible and these management fees just contribute to the problem.” The attorney advancing the case contends that the management company doesn’t actually run the facilities and instead consumes money needed to care adequately for patients.

Nursing home corporations that cut corners on care to increase their financial bottom must be held accountable when their choices result in negligent care and harm.  Contact the Kosieradzki Smith Law Firm today online or toll-free at (877) 552-2873 for no cost initial consultation.