The ongoing saga of a nine-figure False Claims Act case took another turn late last week, with the Department of Justice criticizing a federal judge who tossed out a verdict against the provider.
The case involves whistleblower Angela Ruckh, a one-time employee of Consulate Health Care (at the time operating as La Vie Rehab), who accused the company of overcharging Medicare and Medicaid by inflating therapy claims. In January, a Florida federal judge tossed the original $348 million False Claims Act verdict against the operator out. At the time, U.S. District Judge Steven Merryday said there wasn’t sufficient evidence that the government would have withheld payment for those claims, if it was aware of the billing violations.
Ruckh, who stands to earn a $50 million share of the payout, subsequently appealed that verdict. The DOJ took Ruckh’s side by sharply criticizing Merryday’s decision, noting the jury unanimously awarded the original verdict based on “ample evidence” that Consulate submitted false bills to Medicare. These were “material to payment decisions,” according to Bloomberg Law. As such, the case has satisfied Supreme Court precedent, the DOJ says.
Merryday’s ruling had been seen as a major victory for Consulate and other skilled providers.
Consulate is one of several companies that has found relief through a relatively new judicial standard known as the Escobar decision. Since 2016, courts have ruled that government payments that continued after charges of misconduct are considered signs of immateriality.