$255 Million Medicare Fraud Verdict Against Consulate Health Care Upheld on Appeal in Whistleblower Case Litigated by Kellogg Hansen

WASHINGTON, June 30, 2020 /PRNewswire/ -- The United States Court of Appeals for the Eleventh Circuit affirmed a jury verdict that a management company and skilled nursing facilities owned by Consulate Health Care engaged in a multi-year scheme to defraud Medicare by misrepresenting the level of services they provided.  The court rejected the defendants' argument that their billing practices were immaterial to the government.  The decision reinstates the jury's verdict of $85,137,095, resulting in a judgment of more than $255 million after trebling and statutory penalties.  This represents one of the largest False Claims Act (FCA) jury verdict upheld on appeal.

"We are gratified that the jury's Medicare verdict has been affirmed and we are thankful for our client's personal sacrifice to ensure one of the nation's largest providers of senior healthcare services is held accountable for committing fraud against American taxpayers," stated Derek Ho, lead appellate counsel for the whistleblower, Angela Ruckh.

Ms. Ruckh is a career nurse with more than 20 years' experience working in skilled nursing facilities.  When she worked at Consulate's facilities, she observed them routinely submitting upcoded claims and falsifying reports summarizing patients' medical conditions and treatment. 

Ms. Ruckh filed a False Claims Act complaint in 2011 on behalf of the United States and the State of Florida.  The U.S. Department of Justice and the State of Florida declined to intervene in the case, but Ms. Ruckh and her attorneys persisted and fought the defendants on the government's behalf. 

The case went before a federal jury in Tampa, Florida, in January 2017.  The evidence at trial included not only the financial loss suffered by taxpayers, but also the human cost associated with defendants' practices.  As lead trial counsel, James Webster, explained to the jury: "[T]he mission ... was not care, it was making money.  They placed profits ahead of care.  They pressured the therapists and the nurses to do whatever it took to maximize ... profits." 

After a 20-day trial, the jury returned one of the largest qui tam verdicts in history.  However, the district judge granted the defendants' motion for judgment notwithstanding the verdict.  Ms. Ruckh and her attorneys appealed. 

"The affirmance of the jury's verdict is the culmination of nearly eight years of work on the part of our client and our legal team," stated the whistleblower's lead counsel, Silvija Strikis.  "We are thankful for the trust our client placed in us to take on this case with her."

Kellogg Hansen partners for the plaintiffs include Derek Ho, Silvija Strikis, James Webster and Joseph Hall.  Co-counsel is Royston Delaney, with Delaney Kester LLP, and Kevin J. Darken. 

Trial:  United States ex rel. Ruckh v. CMC II LLC, No. 11-1303 (M.D. Fla. Mar. 1, 2017)

Appeal: United States ex rel. Ruckh v. Salus Rehabilitation, LLC, No. 18-10500, 2020 WL 3467393 (11th Cir. June 25, 2020).

SOURCE Kellogg Hansen