The roller coaster ride of U.S. ex rel. Ruckh v. Genoa Healthcare, LLC continues. In a previous post, we wrote about the staggering $348 million judgment entered following a jury verdict against a management company and skilled nursing facilities (SNFs) owned by Consulate Health Care. The jury found the defendants committed False Claims Act (FCA) violations by artificially inflating Resource Utility Group (RUG) levels for Medicare therapy patients and falsely certifying that the SNFs had created timely and adequate patient care plans required by Medicaid. Following the judgment, defendants filed a motion for judgment as a matter of law under Federal Rule of Civil Procedure 50(b), and as we noted here, the district court judge took the extraordinary step of overturning the judgment on materiality grounds.
In the latest turn, the Eleventh Circuit reversed the district court’s decision in part and reinstated most of the jury verdict. While the district court, in applying Escobar’s materiality standard, had found “an entire absence of evidence” of materiality, the Eleventh Circuit reached the opposite conclusion, holding that “plain and obvious” evidence of materiality supported a jury verdict of $85 million in single damages. The appellate court ordered the district court to enter judgment in treble that amount, plus per-claim statutory penalties under the FCA. That comes to over $255 million.