Crime & Courts

Sumter hospital files challenge to federal fine

Tuomey Healthcare System said the $237 million the federal government is seeking in fines and penalties against the local hospital should be denied because they are unconstitutional, according to motions filed by its lawyers Wednesday.

Last month, after a four-week trial, Tuomey 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. After adding fines and penalties that it said were both mandatory and the minimum possible under federal law, the U.S. Department of Justice filed a motion with the U.S. District Court, seeking $237,454,195.

The hospital had until Wednesday to respond to both the federal government figure, as well as file any potential appeal to the jury’s verdict. While an official appeal had not been filed as of press time Wednesday night, Tuomey spokesperson Brenda Chase said another brief was expected to be filed by Tuomey’s lawyers by the midnight deadline.

“We are very much looking forward to the judge reviewing all of our motions,” Chase said.

As far as the fines the hospital faces, Tuomey’s lawyers say they violate both the Eighth Amendment by constituting both cruel and unusual punishment, as well as the Fifth Amendment because of a violation of the hospital’s rights to due process.

The $237 million penalty was calculated by federal prosecutors by tripling the $39.3 million in Medicare claims the hospital was found to have received unlawfully, as well as a $5,500 penalty for each of the 21,730 false claims. According to the government, the law calls for the automatic tripling, as well as a penalty between $5,500 and $11,000 for each count of fraud.

In its response, Tuomey argues such a fine is a violation of the Eighth Amendment, saying “the severity of the fine far outweighs the gravity of the alleged offense.”

“Such an award would destroy the only hospital in Sumter County. This would be catastrophic for the Sumter community,” the brief reads before citing resolutions and letters from the Sumter County Legislative Delegation, the Sumter Smart Growth Initiative and Sumter Economic Development.

All seven members of the Sumter delegation signed the resolution declaring “the vital importance of the Tuomey Healthcare System to the health and well-being of the citizens of Sumter and request that any action that might undermine this be abated,” while in the letter from Sumter Economic Development, President Jay Schwedler writes, “It is nearly impossible to overstate the importance of Tuomey Healthcare System on Sumter County.”

The dramatic impact of such a fine, the lawyers argue, comes at the same time the government did not suffer any adverse effects from the practices at the hospital.

“The government was not harmed by anything that Tuomey did, economically or otherwise,” the brief reads. “The patients treated at Tuomey received excellent medical care and Tuomey received the proper amount of reimbursement for those services under the Medicare program, and the government does not contend otherwise.”

The brief also claims the $237 million is a violation of the hospital’s Fifth Amendment right to due process, because the jury verdict was the result of reading into the law “a subjective intent element which does not appear in the statute, regulations or commentary.” Because of this, Tuomey argues, it could not have known the type of penalties the hospital was facing.

“To the extent that the jury based its verdict on a heretofore unrecognized subjective intent standard, imposing a colossal damage award would deny Tuomey due process since it did not have fair warning of what the law prohibited,” the brief reads. “Such a result would offend fundamental notions of fairness.”

When the federal government first filed its motion for fees, it said it remained willing to discuss a settlement with Tuomey. And while a settlement number lower than the $237 million could be reached between the government and the hospital, Tuomey’s brief also argues the court does not have the authority to assess a final figure in penalties lower than the amount sought by federal prosecutors. Because of this, coupled with the unconstitutionality of the proposed fine, Tuomey argues the court should ultimately award no penalties at all.

Senior District Court Judge Margaret Seymour will have seven days to reach her final decision regarding the fine.