Tuomey Healthcare System will have to pay more than $237 million in fines and penalties if the judge overseeing its recent federal trial upholds the government’s motion filed Wednesday against the local hospital.
Earlier this month, after a four-week trial, the Sumter hospital was found guilty of violating both Stark Law and the False Claims Act, collecting more than $39.3 million in fraudulent Medicare claims between 2005 and 2009. As a result, the U.S. Department of Justice is seeking $237,454,195.
And while the fine officially sought is substantial, the federal government points out in its four-page brief that under the False Claims Act, the amount is actually the minimum Tuomey can be charged. The total was calculated by tripling the $39.3 million in Medicare claims the hospital was found to have received unlawfully between 2005 and 2009, as well as a $5,500 penalty for each of those 21,730 false claims. The law calls for a penalty between $5,500 and $11,000 for each count of fraud. At the same time, the government says in its motion that it is willing to discuss a settlement with Tuomey.
“We recognize that the defendant’s resources may be inadequate to fully satisfy this judgment and, accordingly, the government remains open to discussing a settlement, on appropriate terms, at a level below the amount of the judgment,” the government writes.
Tuomey has 14 days to respond to the figures. After that, Senior District Court Judge Margaret Seymour will have seven days to reach her final decision. The local hospital also has two weeks left to file an appeal in the case.
Brenda Chase, public relations director for Tuomey, said the local hospital will use the two weeks to formulate its response.
“At this time we are not prepared to comment on settlement discussions, which by their nature are supposed to be confidential,” Chase said.
During the recent four-week trial, Tuomey was accused of signing 19 local doctors to lucrative part-time contracts in 2005 in order to ensure they would continue to receive the referral fees associated with those physicians’ procedures.
Paying doctors with a portion of the referral fees a hospital receives creates an illegal kickback under Medicare law, and the government was seeking to recover all of the Medicare claims Tuomey had filed between 2005 and 2009 for procedures performed by these physicians.
Although the contracts made no mention of referral fees, by signing the doctors to agreements that paid well above fair market value, the government argued Tuomey had done just that.
In its defense, Tuomey’s lawyers argued the contracts were legal and were simply part of the hospital’s effort to ensure it could continue to provide various medical services to an already medically underserved community.
In the end, however, it took the nine-woman, one-man jury only slightly more than four hours of deliberation to decide they agreed with the government and not the hospital.