A settlement has been reached in the federal government's massive False Claims Act case against Cleveland, Tn.-based Life Care Centers of America as well as in a separate lawsuit against Life Care Centers of America founder and still-chairman Forrest Preston.
Benjamin C. Mizer, principal deputy assistant attorney general, said the only remaining issue is the final wording in a corporate integrity agreement that the government will impose on Life Care Centers.
The government has until Oct. 31 to conclude that agreement. Prosecutors earlier said they were close to a settlement.
The government earlier said claims in the case amount to $1.8 billion.
That equates to over $4 million for each of the 437 patients whose treatment is being closely examined by the government in the case that was filed in 2008. The investigation was launched in 2006 - charging that Life Care employees were encouraged to utilize excessively high levels of therapy to maximize Medicare payments.
The government had separately sued Forrest Preston, saying he was "unjustly enriched" by millions of dollars in allegedly unfounded claims for government reimbursement.
Mr. Mizer said, "The parties believe that the settlement process can be finalized by Oct. 31, if not sooner. Since the Court granted the last stay, the parties have fully negotiated the settlement agreement that will resolve this action and the related action against Forrest Preston.
"The United States has also obtained all required approvals to enter into the settlement.
"The only matter which remains is the negotiation of the corporate integrity agreement between Life Care and the Department of Health and Human Services, Office of the Inspector General, to be executed simultaneously with the settlement in this action. Life Care and the Office of the Inspector General have already exchanged several drafts and anticipate that agreement can be reached within the requested extension time.
"Accordingly, the parties anticipate that they will require until Oct. 31, 2016 to conclude the settlement and therefore request a stay of the action to complete the settlement process."