A Florida federal jury in U.S. ex rel. Ruckh v. Genoa Healthcare, LLC, found the operators of 53 skilled nursing facilities liable for more than $115 million in damages stemming from false claims they submitted to Medicare and Medicaid after pretending patients needed and received more care than they did.
The jury ruled on False Claims Act allegations brought by whistleblower Angela Ruckh, who worked at two of the facilities as a nurse, and found that the four defendants — CMC II LLC, Salus Rehabilitation LLC, 207 Marshall Drive Operations LLC and 803 Oak Street Operations, LLC were liable for false claims.
Ruckh said she saw years of corporate scheming meant to “bill Medicare and Medicaid” by upcoding therapies. Angela Ruckh, formerly of La Vie Management, proved that the providers listed in the case presented “false or fraudulent” claims for reimbursement.
The Government has many tools to help it prosecute False Claims Act cases. One such tool is extrapolation—the act of using a sample of resident files to determine an error rate and applying that error rate to a greater universe of resident files. After some initial setbacks including having their case dismissed for lack of necessary detail, the plaintiff complained that to show fraud with detail in every instance was not feasible. The plaintiff instead asked to use the Government’s tool of extrapolation (to be able to have an expert pick out some files, determine an error rate and apply that error rate to a larger universe.) The Federal Government filed a brief in support of permitting private parties this power.
The Court sided with the whistleblower, allowing her to use extrapolation and statistical sampling to estimate the volume of overpayments allegedly received by the defendants. In issuing his decision, District Judge Steven Merryday relied on other cases that accepted statistical sampling methods as reliable and acceptable evidence in determining facts related to False Claims Act claims. Judge Merryday echoed a recent District Court case in Tennessee that considered “the large universe of allegedly false claims” in finding that “it would be impracticable for the Court to review each claim individually” and to do so “would consume an unacceptable portion of the Court’s limited resources.”
Though this case is just the latest in a string of cases upholding the use of statistics and extrapolation to establish liability under the False Claims Act, this decision is unique in that it allows an individual qui tam whistleblower to utilize this powerful tool to demonstrate falsity even where the Government has declined to intervene in the case.