Life Care Center
How Forrest Preston built Life Care Centers into the biggest privately held company in the industry
Today, Life Care Centers of America is the largest privately-owned long-term care facility chain in the United States with facilities across 28 states. It's the third-largest long-term care chain in the nation.
Forbes magazine estimates Preston's ownership of Life Care gives him a personal wealth of $2.1 billion enough to make him the richest man in Southeast Tennessee and land him on Forbes list of the 400 richest people in America.
Federal prosecutors allege Life Care Centers has bilked the federal government of hundreds of millions of dollars through a systematic Medicare fraud scheme since 2006. A federal investigation of the company began in 2008 when Life Care employees in Florida and Tennessee filed whistle blower lawsuits claiming the company told employees to maximize unnecessary therapies for patients to get more Medicare reimbursements. Life Care is paid nearly $1 billion a year in Medicare payments.
The whisteblower lawsuit was combined with a government lawsuit against Life Care in 2012 and the case is still going through evidence discovery. Prosecutors claim the Medicare fraud began at the highest levels of the company, including claims that Preston forbade his compliance department from conducting unannounced inspections at facilities. Critics of Life Care say the company has made staff sacrifices in order to keep profits up.
https://www.timesfreepress.com/news/business/aroundregion/story/2015/apr/27/how-forrest-preston-built-life-care-centers-biggest-privately-held-company-industry/301066/
Life Care Centers of America Inc. Agrees to Pay $145 Million to Resolve False Claims Act Allegations Relating to the Provision of Medically Unnecessary Rehabilitation Therapy Services
Life Care Centers of America Inc. (Life Care) and its owner, Forrest L. Preston, have agreed to pay $145 million to resolve a government lawsuit alleging that Life Care violated the False Claims Act by knowingly causing skilled nursing facilities (SNFs) to submit false claims to Medicare and TRICARE for rehabilitation therapy services that were not reasonable, necessary or skilled, the Department of Justice announced today. Â Life Care, based in Cleveland, Tennessee, owns and operates more than 220 skilled nursing facilities across the country.
“This resolution is the largest settlement with a skilled nursing facility chain in the department’s history,” said Principal Deputy Assistant Attorney General Benjamin C. Mizer, head of the Justice Department’s Civil Division.  “It is critically important that we protect the integrity of government health care programs by ensuring that services are provided based on clinical rather than financial considerations.”
This settlement resolves allegations that between Jan. 1, 2006 and Feb. 28, 2013, Life Care submitted false claims for rehabilitation therapy by engaging in a systematic effort to increase its Medicare and TRICARE billings.  Medicare reimburses skilled nursing facilities at a daily rate that reflects the skilled therapy and nursing needs of their qualifying patients.  The greater the skilled therapy and nursing needs of the patient, the higher the level of Medicare reimbursement.  The highest level of Medicare reimbursement for skilled nursing facilities is for “Ultra High” patients who require a minimum of 720 minutes of skilled therapy from two therapy disciplines (e.g., physical, occupational, speech), one of which has to be provided five days a week.  Â
https://www.justice.gov/opa/pr/life-care-centers-america-inc-agrees-pay-145-million-resolve-false-claims-act-allegations