Federal Judge Says Tuomey Must Come Up with $20 Million to Continue Medicare Fraud Appeal
Sumter hospital Tuomey Healthcare Systems must pay $20 million to continue its appeal of the Medicare fraud penalty in two weeks, according to a federal judge.
On Thursday, April 10th, a federal judge ruled that Tuomey must set aside $70 million to continue the appeal of the False Claims Act violation penalties. The hospital reported that it had set aside $50 million so far.
The hospital has 10 days to appeal the current Medicare fraud ruling and penalty.
On Tuesday, October 1st, 2013, 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. Still, Tuomey claimed that the financial penalty was extreme and would cause the hospital – which is located in a rural area and serves an underserved population – to close and file for bankruptcy.
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.
“Tuomey’s motion for a stay pending appeal is granted as follows,” the court documents state. “Tuomey shall obtain a supersedeas bond or equivalent in the amount of $30,000,000 within ten days of the date of entry of this order. Tuomey and the government also shall enter into an escrow agreement composed of similar mutually-agreeable terms as that entered into between the parties in 2010 (ECF No. 898-1) in the amount of $40,000,000.”
Tuomey officials also said that the hospital would go into bankruptcy if it had to pay the $70 million while awaiting an appeal.
The Strom Law Firm Can Help Protect Medicare Fraud 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 Medicare fraud whistleblower 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.