Angela Ruckh v. Salus Rehabilitation, LLC
963 F.3d 1089
11th Cir.2020Background:
- Relator Angela Ruckh, an RN and MDS coordinator, sued two Florida SNFs, their management company La Vie Management, and an affiliated rehab provider under the federal False Claims Act and Florida FCA alleging upcoding, "ramping," and failure to prepare/maintain Medicaid care plans.
- Ruckh worked at Marshall and Governor’s Creek (Jan–May 2011) and audited practices; an expert audited samples of claims and found instances of inflated therapy minutes, inflated nursing levels, and timing spikes around assessment reference dates.
- A jury found defendants liable for 420 fraudulent Medicare claims and 26 fraudulent Medicaid claims and awarded $115,137,095; the district court trebled and added penalties to enter judgment of $347,864,285.
- The district court later granted defendants’ renewed Rule 50(b) motion and set aside the verdict, holding the relator failed to prove materiality and scienter (and that La Vie had not caused false claim submissions); it alternatively conditionally granted a new trial.
- The Eleventh Circuit affirmed dismissal of the Medicaid claims, reversed the grant of JMOL as to Medicare claims, held there was sufficient evidence of upcoding/ramping and of La Vie’s role/knowledge, reinstated the Medicare verdict ($85,137,095) and remanded for entry of judgment after trebling/penalties.
Issues:
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Standing / litigation funding assignment | Ruckh: retained control and only sold <4% of her share; thus she remains the relator with Article III and statutory authority | Defendants: the funding agreement partially assigns the relator’s interest, violating the FCA and Article III standing, requiring dismissal | Court: Ruckh kept sufficient interest/control; assignment did not strip Article III standing or violate FCA; motion to dismiss denied |
| Medicare fraud (upcoding and ramping) — materiality & scienter | Ruckh: upcoding (inflated therapy minutes and nursing levels) and ramping (timing services around ARDs) were deliberate, material, and caused overpayment | Defendants: errors were clerical/recordkeeping mistakes, not material misrepresentations; insufficient proof of scienter/materiality | Court: evidence (expert audit, testimony, corporate targets/budgets, internal guidance) permitted reasonable jury to find material upcoding and ramping and scienter; JMOL as to Medicare reversed |
| La Vie Management liability ("cause to be presented") | Ruckh: corporate directives, RUG budgets, meetings, presentations and pressure to maximize RUGs caused facilities to submit false claims | Defendants: La Vie did not itself submit claims nor was there proof of a cohesive top-down scheme causing specific claims | Court: applied proximate-cause-style test; evidence supported that La Vie was a substantial factor and that false submissions were foreseeable; jury could find La Vie acted knowingly — JMOL for La Vie on Medicare reversed |
| Medicaid claims (missing care plans) — materiality & claim content | Ruckh: failure to prepare/maintain comprehensive care plans violated Medicaid rules and was (or could be) a condition of payment | Defendants: no evidence Florida actually denies or recoups payment for missing care plans; claims didn’t make specific representations about services | Court: relator failed to prove materiality or that claims made specific representations tied to care plans; affirmed JMOL for defendants on Medicaid claims |
Key Cases Cited
- Universal Health Servs., Inc. v. United States ex rel. Escobar, 136 S. Ct. 1989 (2016) (endorses implied false certification theory; materiality is demanding)
- Vermont Agency of Natural Res. v. United States ex rel. Stevens, 529 U.S. 765 (2000) (qui tam relators have Article III standing as partial assignees of the United States)
- Lujan v. Defenders of Wildlife, 504 U.S. 555 (1992) (Article III standing requirements)
- United States ex rel. Sikkenga v. Regence BlueCross BlueShield of Utah, 472 F.3d 702 (10th Cir. 2006) (uses proximate-causation approach for "cause to be presented" FCA claims)
- Clausen v. Laboratory Corp. of Am., 290 F.3d 1301 (11th Cir. 2002) (FCA liability requires false claims that caused the government to pay)
- Urquilla-Diaz v. Kaplan Univ., 780 F.3d 1039 (11th Cir. 2015) (adopts false certification framework elements)
- United States v. AseraCare, Inc., 938 F.3d 1278 (11th Cir. 2019) (reiterates FCA element structure and causation/prima facie requirements)