Consulate Health Care, faces quarter-billion-dollar fraud judgment

Florida’s largest nursing home provider is again facing a quarter-billion-dollar judgment for fraud that company leaders have said could cause its “immediate economic extinction.”

An appeals court last week affirmed part of a jury’s finding that Consulate Health Care, which operates a tenth of all Florida nursing homes, systematically defrauded the government by providing medically unnecessary treatments to patients.

While calling the judgment “huge,” one industry watcher predicted that Consulate homes will continue operating, even if the company continues to appeal the ruling or files for bankruptcy.

But a union that covers health care workers said patient care could suffer and workers could be left without sufficient protective gear as COVID-19 ravages long-term care facilities nationwide.

“If they actually have to pay this, that’s a scary thought. I don’t know where the money comes from,” said Toby Edelman, senior policy attorney for the Center for Medicare Advocacy in Washington, D.C. “Are they going to take it out of the CEO’s salary? Probably not.”

Consulate, based in Maitland, a suburb of Orlando, owns about 70 of Florida's 693 nursing homes, and operates in every metro area. In all, the privately held company owns and controls about 150 nursing homes and assisted living facilities, mostly in the Southeast and the Mid-Atlantic states.

On its website, Consulate calls itself the nation’s sixth-largest provider of senior health care services.

Consulate spokeswoman Jennifer Trapp did not respond to requests for comment.

Consulate leaders previously laid out the company’s “precarious” financial condition in court documents, arguing that the company was bleeding cash and that a massive legal judgment could trigger a financial collapse that could lead to the “immediate economic extinction” of all Consulate homes.

Brian Lee, former head of Florida’s Long-Term Care Ombudsman program, called the $255 million judgment that was reinstated on June 25 “a very serious penalty.”

“Consulate got caught with their hand in the cookie jar, and the government spanked them with a two-by-four,” said Lee, who now heads the nonprofit Families for Better Care. "This fine is huge."

Lee said he suspects Consulate’s nursing homes will remain open, but if the judgment sticks he worries people who live and work in the facilities will “feel the pinch of this down the line.”

A 2018 USA TODAY Network – Florida investigation found that a majority of Consulate nursing homes in the state received below-average ratings from federal regulators.

“We already know that Consulate has a pretty troubling track record. It could get a lot worse,” Lee said.