Life Care

CEO Should Not Be Part of Lawsuit, Company Maintains

By Lois A. Bowers
(McKnight's Senior Living)

Forrest Preston

Forrest Preston

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.

Coakley Rebuffed by SJC In Bid to Prosecute Nursing Home Firm

By John R. Ellement
(The Boston Globe)

"In this case, we allege the nursing home failed to live up to its obligations to properly care for its residents which resulted in the tragic death of the 74-year-old victim," Coakley’s statement said.

"In this case, we allege the nursing home failed to live up to its obligations to properly care for its residents which resulted in the tragic death of the 74-year-old victim," Coakley’s statement said.

The state’s highest court yesterday rejected Attorney General Martha Coakley’s effort to prosecute a nursing home company for manslaughter because numerous employees allegedly failed to safeguard a 74-year-old resident who died when her wheelchair overturned, sending her tumbling down the home’s front steps.

The Supreme Judicial Court ruled unanimously against Coakley’s unprecedented attempt to hold Life Care Centers of America criminally liable for the “aggregate actions’’ of all the employees she said played a role in the failed care of Julia McCauley. The court said Coakley’s tactic was “illogical.’’

“A corporation may be criminally liable for the crimes alleged here only where at least one of its employees could be found individually liable for the crime,’’ Justice Judith Cowin wrote for the court.

The SJC ruling does not end the criminal case because Coakley may be able to pursue a manslaughter prosecution on a different legal theory — that the actions of a single supervisor caused the woman’s death.

McCauley, who had dementia, was in her wheelchair at 7 a.m. on April 17, 2004, without an alert device on her wrist that closes the facility’s doors. She apparently wheeled herself through the double doors and fell down eight steps, according to the SJC.

Coakley said in a statement that she was disappointed by the ruling and that she would review it before deciding what to do next. Life Care, meanwhile, said it was “delighted with the wisdom’’ the SJC showed in its conclusion.

In the ruling, Cowin wrote that Coakley’s theory of “aggregation’’ was a misguided attempt to improperly transform negligent actions by employees — the basis for civil lawsuits — into crimes committed by the corporations that employ nursing home workers.

“The Commonwealth is attempting to promote conduct that is no more than negligent on the part of one or more employees into wanton or reckless conduct on the part of the corporation,’’ Cowin wrote.

She added, “This theory is illogical and such an argument cannot succeed. If at least one employee did not act wantonly or recklessly, then the corporation cannot be held to a higher standard of culpability by combining various employees’ acts.’’

Cowin noted that in Massachusetts, the legal ground rules for prosecuting someone for involuntary manslaughter were established in 1944 when Barnett Welansky, an owner of the Cocoanut Grove nightclub in Boston, was charged in the Nov. 28, 1942, fire, which killed 492 people. He was convicted and sentenced to 12 to 15 years in prison. He had served three years and seven months of that term when he was granted a pardon.

“Conduct is wanton or reckless only when the actor disregards a high likelihood of probable harm to others,’’ Cowin wrote as she cited the Welansky case in the ruling. She wrote the evidence suggested the company was negligent, not criminal, in its handling of McCauley.

The Globe reported in 2007 that McCauley had lived at Life Care Center in Acton since 1996, but had a habit of wandering away. Doctors ordered her to have a device put on her wrist that sets off an alarm and closes the center’s doors when patients get near them.

But investigators found that for 2 1/2 months before her death, McCauley hadn’t worn the protective bracelet because the doctor’s orders were not written on her medical charts. If the orders were on her charts, McCauley would have to have been checked daily to make sure the safety device, called WanderGuard, was in place and functioning.

In 2007, Coakley’s prosecutors convinced a Middlesex grand jury to return a manslaughter charge against Life Care, a Tennessee-based operator of nursing homes nationwide.

In her statement yesterday, Coakley said that “we respect but are disappointed by this decision. In this case, we allege the nursing home failed to live up to its obligations to properly care for its residents which resulted in the tragic death of the 74-year-old victim. We are continuing to review this decision to determine its impact and will evaluate our next steps in prosecuting this case.’’

Life Care said the SJC “has completely vindicated Life Care Centers of America on the theory of collective knowledge and has sent an important statement, not just for Life Care, but on a national level for criminal corporate law. As always, the protection and care of our residents remains our highest priority — in Acton and across the country.