In 2011, a nurse employed in two nursing homes owned by Consulate Health Care, LLC, a notoriously bad nursing home chain in the state of Florida, filed a whistleblower lawsuit against the company. She filed the suit for what she saw as the company’s obvious fraud in billing the federal government. It was not until 2017 that a jury awarded a $347 million judgment in favor of Medicare and the whistle blower. That is an eyepopping amount. Because fraudulent billing is so pervasive throughout the nursing home industry, it is not unusual to see $30, $40, or even $140 million settlements between DOJ and nursing home corporations. But this outfit must have been into some big-time fraud.
However, the story does not end well for taxpayers footing the bill for healthcare in America. A federal judge threw out the jury’s award. The appeal judge’s reasoning is dumfounding and shocking. According to The News-Press of Fort Myers, Florida, the judge “overturned the jury’s verdict, citing lack of evidence of a corporate scheme and noting that state and federal regulators appeared to view the disputed practices with ‘leniency or tolerance or indifference, or perhaps with resignation.’” In essence, the judge stated that the government just didn’t care if the company was engaging in obvious fraud!
Although an appeals court reinstated $255 million of the judgment, in the final analysis, the company was able to engage in a legal maneuver by taking a part of the company into bankruptcy. This month – 10 years after the lawsuit was initiated – the whistleblower and the government settled for a mere $4.7 million.
I will be following this story and discussing the outcome of the bankruptcy. The judgement is filled with legalese and jargon. But it appears that Consulate will be moving forward with little more than a minor glitch in its operations. The company didn’t even get a slap on the wrist – it was more like a kiss on the cheek. And that part about the government didn’t seem to give a damn doesn’t surprise me at all. Having interacted extensively with state and federal agencies ostensibly regulating public funded healthcare corporations on our behalf, I’m jaded enough to believe it.