Upcoding case leads to $347M judgment

Florida-based skilled nursing chain Consulate Health Care was hit with a $347 million judgment in early March after a jury found that it routinely inflated its Medicare and Medicaid claims.

Judge Steven D. Merryday, with the U.S. District Court for the Middle District of Florida, however, granted an emergency motion to stay the judgment in late March. He noted that the providers named in the suit don't have the money to pay the judgment, which would potentially trigger a halt in operations and jeopardize 17,000 residents. 

The jury's verdict, reached in mid-February, sided with whistleblower Angela Ruckh, who worked for the provider when it was known as La Vie Rehab. Ruckh was granted permission to use statistical sampling to show that Consulate spent years engaged in a “corporate scheme to bilk Medicare and Medicaid” by inflating therapy claims.

The jury's verdict called for $115 million in Medicare and Medicaid damages. March's judgment triples that amount under provisions of the False Claims Act, and it adds the minimum penalty of $5,500 for the 446 cited false claims.

Consulate is on the hook for $331 million of the total judgment, with the other $16 million to be paid by two other groups that owned facilities managed by Consulate. 

Consulate was not commenting on the judgment as of press time, a spokeswoman told McKnight's

Terence J. Lynam, an attorney who represented Consulate in the case, told Bloomberg BNA in March that he was planning to file a motion to set aside the jury's verdict.   

The providers had until March 29 to file a renewed motion for judgment, according to published reports.