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Attorney General Baker and United States Attorney Nahmias Announce Major Patient Protection Settlement With Lawrenceville Nursing Facility

PRESS ADVISORY

Attorney General Baker and United States Attorney Nahmias Announce Major Patient Protection Settlement With Lawrenceville Nursing Facility

December 22, 2005

Attorney General Thurbert Baker joined with United States Attorney David Nahmias today to announce that Life Care Centers of America, Inc., which operated a Lawrenceville nursing facility known as Life Care Center of Lawrenceville, along with Gwinnett Operations, a Tennessee Limited Liability Company, which was a successor to Gwinnett Medical Investors Limited Partnership, Developers Investment Company, Inc., and Forrest L. Preston, the owners of the Lawrenceville facility, have agreed to pay a total of $2.5 million to resolve multiple allegations of federal False Claims Act violations for billing for services that either were not provided or were worthless to the Lawrenceville residents.

A federal complaint, originally filed by five whistleblowers in November 2002, alleged a systemic failure by Lawrenceville to provide appropriate nursing care to its residents. The complaint also alleged that such failure resulted in the premature deaths of several residents. The whistleblowers' complaint alleged that the failure of care was the result of severe understaffing, inadequate staff training, high staff turnover, an ineffective medical director, poor nursing documentation, and insufficient financial resources provided for the facility’s operation by the ownership of the facility. The whistleblowers all had family members who were residents at the Lawrenceville facility.

The United States and the State of Georgia have agreed to dismiss the lawsuit in exchange for a total payment of $2.5 million, with $1,008,000.00 being returned to the state Medicaid program, $1,092,000 returned to the federal Medicare program. The three private citizens who originally filed the qui tam action and who remain parties to this case will receive a total of $400,000 for their efforts pursuant to the False Claims Act. In addition, Life Care Centers of America and the Lawrenceville facility have agreed to enter into a Corporate Integrity Agreement which requires Lawrenceville to implement policies and procedures designed to ensure compliance with applicable statutes and regulations governing patient care. The agreement also provides for the appointment of an independent monitor who will oversee operations at the Lawrenceville facility for up to five years to verify that its policies and procedures are working effectively and that patients receive appropriate care. Life Care Centers of America also has voluntarily agreed to apply the policies and procedures implemented for the Lawrenceville facility to all other facilities operated by Life Care Centers of America across the country.

At today’s news conference announcing the settlement, Georgia Attorney General Thurbert Baker said, "Today's settlement reaffirms the commitment of both the State of Georgia and the federal government to pursue allegations of improper care provided to Georgia's elder citizens. In failing to provide sufficient care for these nursing facility residents, Life Care placed at risk the very residents who had been entrusted to its care. This settlement sends a clear message that taking shortcuts to improve the financial bottom line in the medical arena will have legal consequences."

United States Attorney David E. Nahmias added, "This case demonstrates that the government will not tolerate a nursing home's failure to provide adequate care to the elderly, our most vulnerable citizens; and that the government will continue to ensure that public funds expended on behalf of nursing home residents are used appropriately to provide them with adequate care and services. While we always expect to recover the public funds improperly expended, in these nursing home cases, our primary goal is to ensure good patient care. Life Care's willingness to voluntarily apply the policies and procedures implemented at Lawrenceville to its other facilities helps further this goal." The investigation was handled by the Georgia Attorney General's Office, the United States Attorney's Office for the Northern District of Georgia, the Civil Division of the United States Department of Justice, the United States Department of Health and Human Services, and the Office of Inspector General.