The Justice Department and a medical whistleblower have tentatively agreed to settle a $256 million civil fraud judgment against a large nursing home chain for $4.5 million, according to court documents filed on Monday in U.S. Bankruptcy Court in Delaware, the Washington Post reported. Entities operating under Consulate Health Care, a chain based in Florida tied to private equity company Formation Capital, filed for chapter 11 protection in March. The sixth-largest nursing home chain in the country with 140 facilities from the Mid-Atlantic to the Gulf Coast, it said that it did not have the resources to pay the large False Claims Act judgment against it. A federal civil jury in 2017, in a decision later upheld by the U.S. Court of Appeals, concluded that nursing homes now owned by Consulate defrauded taxpayers through inflated billings for rehabilitation services for residents. The penalty was the culmination of a whistleblower case brought in 2011 against an earlier owner of Consulate’s nursing homes by Angela Ruckh, a nurse who worked at two of the chain’s nursing homes. In the proposed bankruptcy settlement, the United States will receive $3.375 million and Ruckh will get $1.125 million, according to a copy of the proposed agreement filed in court by Consulate’s lawyers. Consulate’s operations division, headquartered in Maitland, Fla., and two of its nursing homes will be sold to another entity that also is related to Consulate, according to public records and court documents.
