published Friday, March 28th, 2014

Judge: Federal suit against Life Care can continue

Life Care Centers of America, headquartered in Cleveland, Tenn.
Life Care Centers of America, headquartered in Cleveland, Tenn.
Photo by Jenna Walker /Chattanooga Times Free Press.

A federal judge has denied a request by Life Care Centers of America to dismiss a multimillion-dollar whistle-blower lawsuit against the Cleveland-based company.

U.S. District Judge Harry S. "Sandy" Mattice issued his order Thursday, which means the lawsuit can proceed. The suit alleges the company bilked millions from Medicare by conducting "unnecessary" and often "harmful" treatments to elderly patients in some of its more than 200 nursing homes nationwide.

The company's attorneys have denied the allegations in court hearings and claimed that federal prosecutors are evaluating patient-care decisions made by individual doctors.

Mattice rebutted the company's claim. He wrote that the company could be held responsible for false claims filed to Medicare if prosecutors' allegations detailing a systematic push for increased Medicare billing from the corporation's chief operating officer to facility managers are true.

Two separate, previously sealed lawsuits were merged into one whistle-blower lawsuit -- allegations from then-company employees Glenda Martin and Tammie Taylor. Martin filed her case in 2008 in Tennessee; Taylor filed hers in Florida in 2012.

The cases remained sealed until a 2012 hearing involving Times Free Press attorneys who pushed for access to hearings and court documents. Mattice ruled that the cases would be open to the public.

Neither side in the lawsuit has commented on the case, which could involve fines totaling more than $100 million. The law allows for a fine of $5,500 to $11,000 per false claim. Prosecutors allege hundreds of such claims from 2006 until 2011 and they are seeking to triple the amounts as part of their case.

The next scheduled hearing on the case is on May 13. Both sides have agreed to a schedule that requires a statistical sample of the company's records be exchanged and evaluated. The next step is for Mattice to determine if prosecutors can proceed against the company as a whole or if they must go after each individual case separately.

The records sample will help the judge determine which direction the case will take.

Any potential trial would take place sometime after the last depositions deadline of Aug. 5, 2015.

Contact staff writer Todd South at tsouth@timesfreepress.com or 423-757-6347. Follow him on Twitter @tsouthCTFP.

about Todd South...

Todd South covers courts, poverty, technology, military and veterans for the Times Free Press. He has worked at the paper since 2008 and previously covered crime and safety in Southeast Tennessee and North Georgia. Todd’s hometown is Dodge City, Kan. He served five years in the U.S. Marine Corps and deployed to Iraq before returning to school for his journalism degree from the University of Georgia. Todd previously worked at the Anniston (Ala.) Star. Contact ...

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