CEO Should Not Be Part of Lawsuit, Company Maintains

August 28, 2015

Some media reports about the ongoing False Claims Act lawsuit involving Life Care Centers of America have been misleading, according to the company.

Life Care Centers of America says that the company's founder, CEO and chairman, Forrest Preston, has not been named a defendant in the case; rather, the government has asked that he be added as a defendant, Life Care Centers' Beecher Hunter tells McKnight's Senior Living.

The government originally filed the lawsuit against the company in 2008. Prosecutors asked that Preston—the sole shareholder of the Cleveland, TN, provider of independent and assisted living, Alzheimer's and memory care, inpatient and outpatient rehabilitation and skilled nursing at more than 220 locations in 28 states—be added as a defendant in early August. They maintain that he personally saw financial gains from overbilling the federal government for medical services provided to residents. In a 20-page motion filed in a U.S. District Court, however, attorneys for Life Care Centers say that the request comes too late, is without merit and would delay resolution of the case.

"The motion to include Mr. Preston as a named defendant in the case adds no new claims whatsoever," attorney Don Howarth of Howarth and Smith, said in a statement posted on the Life Care Centers website. "It is puzzling that the government would seek to include Mr. Preston as a party at this late date when it made a conscious choice not to do so at the outset. Life Care continues to believe in the best interest of its patients and in its important therapy programs. Life Care will not bow to government pressure by way of including Mr. Preston in the case or otherwise, and will continue to vigorously defend the lawsuit and stand up for the rights of its patients to obtain full rehabilitation therapy."

A judge in the case is waiting for a response from the government before ruling on Life Care Center's motion that Preston not be added to the lawsuit.