In major news for the skilled nursing industry, the $347.86 million judgment against affiliates of Consulate Healthcare was vacated in its entirety by the United States District Court, Middle District of Florida earlier this week. This was basically a Medicare “fraud” case. The judge ruled that the plaintiff’s assertions that a “handful of paperwork defects (for example, unsigned or undated documents) compel the decisive inference that the defendants never provided the therapy evidenced by the paperwork and billed to Medicare” was just plain wrong. To boot, the government continued to pay the defendant even though the government knew there were some disputes between the two sides regarding payments, and with these continued payments after “it learns of the alleged fraud substantially increases the burden on the plaintiff in establishing materiality.” The plaintiff did not meet that burden, according to the judge.
Now, the judge had previously set that judgment aside as too large, deciding that the penalty would bankrupt the defendant and possibly result in the closing of many nursing facilities. What we don’t understand is why it took so long for the judge to come to this recent conclusion, something that seems a little too obvious today.
This brings to mind the dismissal of the case against HCR ManorCare a few months ago, which was one big issue preventing Quality Care Properties from working out a final resolution with its tenant. Other than phantom patients (or employees), Medicare fraud in SNFs is never that easy to prove because there are so many grey areas. Does upcoding for therapy occur? We assume so, but if it is not egregious, it can also be a matter of opinion or interpretation. Do all providers want to maximize reimbursement? Of course, but that doesn’t mean they are breaking the law. Our problem has always been being paid for care that is not provided, or not provided well, not being paid for care that may be excessive.
