National Nursing Home Chain Accused of Billing for Care

According to recent reports, Americans spend hundreds of billions of dollars each year on unnecessary medical tests and treatments. Many people believe that’s one reason why health care costs are so high. “CBS This Morning” has looked into the rehab practices of Life Care Centers of America, the third largest nursing home chain in the country. It has more than 30,000 beds in 28 states. A number of former employees told CBS that the company has been giving patients rehab they don’t need, and billing the government for money they are not entitled to. Helen Toomey, a former assistant manager and speech therapist at the company’s Plymouth, Massachusetts facility, blew the whistle on Life Care. She said that “the mission statement” that Life Care has “is no longer true.” She said the mission had been “to serve their residents in a Christian-based atmosphere” and that it has changed dramatically.
Among other services, Life Care provides speech and physical therapy. But Ms. Toomey, who worked at multiple Life Care locations between 1998 and 2012, says by the time she left, 40 percent of the work she was being told to administer was not reasonable or necessary. Ms. Toomey had this to say:
The felt that no one was watching them and so every patient that came through the building they could charge the highest rate of reimbursement, regardless of their diagnosis or need.
Ms. Toomey told CBS that it got so bad that she resigned. But on her way out, she took some patient notes with her. They show how Life Care would not let patients leave, so the company could continue to bill Medicare, according to Ms. Toomey. On December 30, 2011, for example, they indicate that Ms. Toomey tried to discharge four patients and that all four of those requests were denied. It was reported that a copy of the notes have been provided to CBS.
It was reported that the day after Ms. Toomey resigned, she got a phone call from a Life Care supervisor. Fortunately, she let the call go to voicemail and saved the message. The tone of the message, which is set out below, indicated apprehension on the part of Life Care:
I was calling to see if you might have by mistake taken the communication book, the spiral book. They had it in the office at noon time and thought you may have just grabbed it by mistake when you were leaving.
Ms. Toomey says the supervisor knew exactly what was in the notebook and didn’t want the contents revealed. The good news is that the FBI also knows now what is in the notebook. According to CBS, Ms. Toomey has already spoken with federal agents. The Justice Department is currently suing Life Care centers nationwide for Medicare fraud.
Investigators found that from 2006 to 2011, Medicare paid Life Care $4.2 billion. It was reported that in 2008, Life Care “billed nearly 68 percent of its Medicare rehabilitation days at the highest level, which was almost double the nationwide average of 35 percent. The Justice Department wrote that the wrongdoing came from the top, saying:
Cathy Murray, Life Care’s former Chief Operating Officer…frequently told her employees, their job was to make money for Forrest Preston, the founder, sole shareholder, and Chairman of the Board of Life Care.
Unfortunately, this story isn’t just about one company. The latest report from the Inspector General found industry-wide, a quarter of all Medicare payments to nursing homes are made in error, costing taxpayers $1.5 billion a year. The problem is Medicare rarely checks if the care is necessary. Jodi Nudelman, regional inspector general at the U.S. Department of Health and Human Services, has been sounding the alarm on this for years. She says it is a growing and serious problem, and Medicare has yet to take significant action. Ms. Nudelman added:
All of us are paying the cost. Until you create incentives to bill for the right care, and not for the most care, the problem will continue.
The federal government says that fraud in the Medicare program is unacceptable and that it’s constantly ramping up efforts to stop it. That’s good to know and hopefully there will be follow-up. As for the Life Care case, the Justice Department is currently sorting through hundreds of patient records to estimate the total amount that taxpayers are owed.

Source: CBS News