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Medicare Fraud Could Lead to Hospital’s Closure

Medicare Fraud Penalties Could Lead Hospital to Close

medicare fraudAccording to attorneys for the hospital, Tuomey Healthcare System could close its doors if it is forced to the full judgment in a Medicare fraud case.

The attorneys say in court papers that closing the hospital would be “a public health disaster” for the area unless a stay is granted in the case. They add further: “If a stay is not granted, Tuomey’s ability to operate as a going concern will be immediately impaired,” stated the motion. “Tuomey, and the public it serves, will suffer irreparable harm.”

“If the Government is allowed to execute upon the judgment before Tuomey’s right to appellate review is exhausted, Tuomey will be financially ruined and the people of Sumter and Shaw Air Force Base will suffer irreparable harm,” continued the motion.

“In this case, denial of a stay would require Tuomey to immediately pay the entirety of the $237,454,195 judgment—a fiscal impossibility. The inevitable result will be that Tuomey as it currently operates—a charitable institution that provides care to a community that is both underserved and underinsured, taking all patients regardless of ability to pay—would cease to exist.”

While parties explore the possibility of a settlement in the Medicare fraud case, the federal government has agreed to refrain from taking action for enforce full judgment. The nearest hospital to Tuomey is Clarendon Memorial Hospital, which is 20 miles away. The hospital employs about 1,700 people directly, and is indirectly responsible for 5,000 healthcare jobs.

The federal government seeks $237 million in damages for the Medicare fraud. According to federal prosecutors, Tuomey Healthcare collected $39 million in false claims and Medicare fraud between 2005 and 2009, based on inaccurate billing for doctors’ procedures. A previous whistleblower trial in 2005 also found Tuomey guilty of Stark Law and False Claims Act violations – a four week trial with a 10 person jury ruled that the healthcare group was in effect paying kickbacks to doctors who were contracted part-time, but paid full-time wages.

Under Medicare law, it is illegal to pay physicians with part of the referral fees received, and constitutes kickbacks, which violates the False Claims Act. Tuomey allegedly filed several of these illegal referrals between 2005 and 2009 for procedures performed by the physicians. The doctors’ contracts suggested nothing about the referral fees paying a portion of their salary, but prosecutors for the government argued that Tuomey paid far more than fair market value to sign the physicians on, and therefore kickbacks had to be involved in their pay.

The Strom Law Firm Can Help Protect Whistleblowers with the False Claims Act

If you are personally aware of a fraud that has been committed by your current or former employer, a competitor or otherwise, from tax evasion to Medicare fraud, contact the Qui Tam attorneys at the Strom Law Firm today for a no cost consultation to discuss the facts of your case and whether filing a qui tam may be appropriate. We understand the complexity of the False Claims Act, and can help you with your case. We offer free, confidential consultations so contact us for help today. 803.252.4800.

About Pete Strom

Defending criminal charges including drug crimes, DUI, CDV, mail fraud, wire fraud, bank fraud, computer crimes, money laundering, and juvenile crimes, Pete also handles Federal and State investigations. Representing individuals in Civil Matters including Class Actions, Personal Injury, Qui Tam Actions, Defective Products, Nursing Home Neglect, and Professional Licensing Defense cases. Joseph Preston “Pete” Strom, Jr., the managing partner at Strom Law Firm, L.L.C., has been fighting for justice since 1984.

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