On Tuesday, October 1st, a federal judge ruled that Tuomey Healthcare Systems would pay for False Claims Act violations and Medicare fraud. The total penalties in her ruling were $276 million. However, on Wednesday, October 2nd, the judge ruled to lower that penalty by $39 million.
Senior US District Court Judge Margaret B. Seymour lowered the financial penalty against Tuomey Healthcare to $237.4 million on Wednesday, in part because lawyers for the defense filed a notice of appeal. The $39 million removed from the original penalty was for just Medicare fraud charges, while $237.4 million was for False Claims Act charges, and was the original amount that federal prosecutors asked for.
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.
Defense for Tuomey also argued that, even if the contracts were illegal and relied on kickbacks and violated the False Claims Act, the hospital system relied on the advice of its legal experts. Tuomey’s lawyers said on Tuesday after the ruling that they would file an appeal.
The motion for a retrial filed by attorneys for Tuomey Healthcare was denied on Tuesday, when the financial penalties were levied.
Whistleblower Lawsuit Under the False Claims Act
Under the qui tam provision of the False Claims Act, the relator (plaintiff) files an action on behalf of the U.S. Government. The Act allows a wide variety of people and entities to file a qui tam action.
An employee who blows the whistle on his or her employer (commonly known as a “whistleblower”) is one of the most common types of relators. Many employees normally file qui tam actions against their employers after repeated attempts to resolve the issues internally have met with negative results. This can be as simple as an employee calling into a compliance hotline or something as serious as reporting the incident to a supervisor. However, employees who file a qui tam action, or those that assist in furthering an action, are legally protected against job retaliation by the employer.
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, 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.