Will Judge Save Consulate Health Care From $331M Judgment?

 

Nursing home chain Consulate Health Care is staring down the prospect of paying $331 million after a jury found the company illegally upcoded Medicare therapy claims (United States ex rel. Ruckh v. CMCII, LLC, M.D. Fla., No. 11-cv-1303, judgment 3/1/17; United States ex rel. Ruckh v. CMCII, LLC, M.D. Fla., No. 11-cv-1303, judgment 3/1/17).

Consulate’s counsel told Bloomberg BNA on March 2 that the company would urge Judge Steven D. Merryday to set aside the jury’s verdict, and resulting damages award, however. Consulate’s motion is due before the end of March, and health-care providers and attorneys are anxious to see whether Merryday will allow a rare False Claim Act jury verdict and award to stand.

The huge money damages are a product of the FCA’s provision that mandates a tripling of the losses suffered by government programs like Medicare and Medicaid from a defendant’s wrongful conduct.

This sort of judicial back peddling isn’t unheard of in litigation in general, or FCA litigation in particular. A similar situation played out in a federal court in Alabama when a district judge granted a hospice provider summary judgment on FCA allegations in a March 2016 ruling after a jury returned a verdict finding that the defendant, AseraCare Inc., submitted false claims.

Merryday did express skepticism at whistle-blower Angela Ruckh’s purported evidence of improper upcoding of Medicare claims for therapy services in a Dec. 1, order, despite the jury’s apparent acceptance of the evidence as enough to find 446 individual FCA violations.

While the AseraCare verdict did show that a federal judge can decide after a verdict that a jury was perhaps too eager to assign legal violations to Medicare claim submissions, the federal judge in the AseraCare litigation set aside the jury’s verdict by granting summary judgment to the hospice provider. Merryday’s Dec. 1 order, only a couple of months before the start of trial, specifically rejected Consulate’s motion for summary judgment, perhaps making the AseraCare precedent less likely for a repeat result.

Read more about the Consulate Health Care FCA litigation in my story here.

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