published Sunday, December 9th, 2012

Gerber: Court watching pays off

Reporters have a lot of high-tech tools at their disposal these days. Still, nothing beats old-fashioned, shoe-leather reporting: knocking on doors, combing through public records, building sources and sticking with a story until you have all the facts.

That’s how reporter Todd South, who covers courts for the newspaper, recently broke a big story.

South reported Nov. 30 that the federal government is investigating Life Care Centers of America, a nursing-home company based in Cleveland, Tenn., for a suspected nationwide, multi-million dollar Medicare fraud scheme.

Last spring, South got a tip from a source about the case. He kept an eye on the federal court docket. He spotted a hearing for USA v. Life Care scheduled for Sept. 14 and showed up.

It was a Friday afternoon and federal court was “dead as a church,” South said. He was the only non-lawyer in the courtroom and clearly the lawyers didn’t want anyone else there — especially not a reporter.

A federal prosecutor asked the judge to clear the courtroom because the case was sealed. South asked that he be allowed to call Bud Jackson, an attorney with the Chambliss, Bahner and Stophel law firm, who represents the newspaper.

Jackson zipped over to federal court. He had to borrow a co-workers’s coat because he wasn’t expecting to be in court that day.

Jackson petitioned the court to allow the newspaper to intervene in the case and requested that the courtroom be open to the newspaper when the hearing resumed. He also asked the court to unseal the records.

After several filings by Jackson and the federal prosecutors arguing whether the hearings should be open and records unsealed, the judge allowed both, granting Jackson’s request.

The files were unsealed on Nov. 30.

The federal judge who unsealed the case made it clear is his written opinion that federal prosecutors kept the fraud case under seal for too long.

“The length of time this case has remained under seal borders on the absurd,” U.S. District Judge Harry S. “Sandy” Mattice wrote.

Life Care Centers disputes the allegations and claims its therapy methods saved Medicare $400 million from 2006 to 2010.

But regardless of whether Life Care Centers or the government prevails in the case, it should not have been hidden

from the public.

Here’s why:

• Federal prosecutors allege that Life Care Centers has bilked the government of hundreds of millions of dollars since at least 2006, and that the practice “represents corporate policy throughout Life Care’s skilled nursing facilities.”

• The government alleges the fraud involved patients receiving unnecessary and often harmful therapy treatments for the highest possible Medicare reimbursement.

• Many Americans trust Life Care Centers to care for their loved ones. The company has more than 200 facilities in 28 states.

• It appears that government prosecutors may have been using the threat of the case going public to get Life Care Centers to ante up at the settlement table. Prosecutors began settlement negotiations with the company in June 2010.

• Taxpayers foot the bill for big, complex cases like this one, and have a right to know how their money is being spent. Prosecutors had assistance from lawyers in seven U.S. attorneys’ offices, 10 Health and Human Services agents and four lawyers with the Commercial Litigation Branch of the Department of Justice. By the time the case was unsealed, investigators had interviewed more than 150 witnesses across the nation, issued 35 subpoenas and received 200,000 documents from Life Care Centers. That kind of legal work does not come cheap.

• This started as a whistleblower case, and the reason such cases are kept sealed is so investigators can gather information without the alleged perpetrator being able to conceal or destroy evidence. Prosecutors began negotiating a possible fine and unveiled details of their investigation through records requests in 2010. The only party not privy to the dealings was the public.

• Medicare is funded with public money, and between 2006 and 2011 Medicare paid $4.2 billion to Life Care Centers. If the government believes even some of that money was obtained fraudulently, the public has a right to watch the case unfold. And let’s not forget that how to pay for health care — and who pays — is one of the hottest public policy topics in American today.

For local readers, this story is important for another reason: The company is based right here in Cleveland, Tenn., and is one of the area’s big employer.

The Times Free Press will continue to cover the case. Stay tuned. Keep reading.

Alison Gerber is the managing editor of the Chattanooga Times Free Press. Reach her Send suggestions

Comments do not represent the opinions of the Chattanooga Times Free Press, nor does it review every comment. Profanities, slurs and libelous remarks are prohibited. For more information you can view our Terms & Conditions and/or Ethics policy.

Yes, Watching and diligence is how it's done. Way to go Todd South.

December 9, 2012 at 12:06 a.m.
daytonsdarwin said...

Excellent job, Todd and TFP. I hope it goes to trial to expose the corruption of Life Care in stealing money from taxpayers, harm to patients through questionable therapy, pursing money over patient care, and the influence of lawmakers and politicians through campaign contributions and payola.

Families of patients should get the patient's medical records and pursue legal actions against Life Care and their corporate entities.

Check to see how much "medication" was given to keep patients in near vegetative states. Cross-check with medically-informed lawyers about abuses in these nursing homes by staff and lack of reasonable care.

Don't be fooled by the dog-and-pony shows that Life Care pretends to believe while ripping off patients and families.

Stealing from able-bodied people is bad enough. Stealing fortunes from the sick, weak, and emotionally damaged patients and families is criminal and deserves criminal prosecution in addition to civil penalties.

Expose these traffickers in human misery for profit. Keep up your investigations.

December 9, 2012 at 1:47 p.m.
jesse said...

I can actually remember when this was the normal way a newspaper operated! Wern't no big deal ,it was what newspapers did,they got out and dug up the stories and kept the readers informed! NOW if they do something like that they get on here and give themselves a BIG pat on the back!You need to be doin this stuff EVERY day,it's what a newspaper is supposed to be all about!

December 10, 2012 at 7:03 a.m.
fairmon said...

TFP deserves a pat on the back. The print meda is struggling to compete with the 20 second news clips on the main stream viewing media and their effort to gain favor depending on their personal bias.

Perhaps it is time for concerned local citizens to start a fund to assist the TFP in hiring and retaining aggreesive investigative reporters that dig out and report facts to the public and allow the public to reach their own conclusions instead of attempting to influence opionons.

It would be interesting to see the facts about the city owning so many businesses that compete with privately owned businesses. The citilization locally is something people should be concerned about. Citilization is an expression comparing the cities behavior to nationalization of businesses by some socialist countries.

December 10, 2012 at 3:20 p.m.
jesse said...

I agree harp,except about the golf courses!

Every city of any size has a muni golf course!

The two in Chatta.are self funded,they pay their own way!

actually Brown Acres helps support Brainerd g.c.

December 11, 2012 at 8:47 a.m.
aae1049 said...

On the contrary Mr. Jesse, the Golf Course fees DO NOT fund the operation of the golf course. Why should tax payers subsidize golf games, non essential service that is not a function of government? just asking

A+ comment, Harp, "Perhaps it is time for concerned local citizens to start a fund to assist the TFP in hiring and retaining aggreesive investigative reporters that dig out and report facts to the public and allow the public to reach their own conclusions instead of attempting to influence opionons"

The TFP has some rock star investigative reporters, they do. Investigative pieces are very very expensive, and I believe that is the driver when the newspaper is in the money making business. Little Chicago Watch picked up this piece where the TFP stopped, and open records for the appraisals documents, and full soil studies were hundreds of dollars and required 2 people 2 weeks. Money is the driver.

December 11, 2012 at 1:04 p.m.
jesse said...

You're talking from where the sun don't shine aae1049!

The golf courses get 0 bucks from the city!

They HAVE to operate on revenues they generate them selves!

December 12, 2012 at 1 p.m.
fairmon said...

jesse said...

The golf courses get 0 bucks from the city!

They HAVE to operate on revenues they generate them selves!

That being the case how does the city and tax payers benefit by the city owning a golf course? Do the courses pay property taxes, do they have work done by the public works department? Do they pay the fees other businesses pay. If they can be self sustaining then they would do just as well being privately owned and competing with other courses in the area. The same is true with the marina at Ross's landing, The Chattanoogan, The city owned pharmacy and other businesses.

December 13, 2012 at 2:38 a.m.
jesse said...

I don't know what the tax setup is harp but public works people do zero work on the golf courses,it's all done by the maintenace crew at the course ! The city also owns Mocc.Bend golf club but leased it out to H.M.S. management corp!

The only two courses close by that compete are Bear Trace(owned by the state)and Eagle bluff>(priv.owned!)

December 13, 2012 at 12:17 p.m.
aae1049 said...

Harp, the City does in fact subsidize the golf courses, it is in the City current budget, I have generated a pdf from the city budget and will post it later this afternoon.

Jesse, green fees do not cover the operation of the City courses by any stretch of the imagination, as you will see.

December 13, 2012 at 12:34 p.m.
jesse said...

Well i just spent the last 11 years working w/the golf ind. in chatta,(w/Chatta. owned G.c.'s ) But i guess that means i don't know sh!t!

December 13, 2012 at 1:13 p.m.
aae1049 said...

It just means that I am going to post the City's budget showing golf course revenues v expenditures, because the Golf Course does not break even with fees. However,you could be correct. I am just getting the numbers to verify.

December 13, 2012 at 10:39 p.m.
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