Stark violations: Tuomey Healthcare in South Carolina ordered to pay $50 million

Tuomey Healthcare System in Sumter, S.C., must re-pay the federal government $44.9 million plus interest ($49.2 million and counting as of June 4) in Medicare payments that the hospital system received via physician contracts in violation of the Stark Law--and also could face a new trial involving alleged False Claims Act (FCA) violations, reports The Item.

In late March, a jury found that the hospital had committed Stark Law violations involving 18 part-time physicians working at its outpatient surgery center. However, the jury also decided that Tuomey hadn't violated the False Claims Act and consequently wouldn't have to pay the $227.5 million in fines and penalties sought by the government.

Senior U.S. District Judge Matthew J. Perry Jr. cited U.S. Supreme Court case law to deny a motion brought by Tuomey that the government shouldn't be able to recoup any money. Instead, Perry ordered Toumey to pay the amount that the government proved Tuomey received from Medicare from Jan. 1, 2005, through June 30, 2009, as a result of the physician contracts.

Perry also decided the government deserved a new trial for the FCA allegations, saying he was wrong not to allow the trial jury to consider excerpts from the deposition of Tuomey Chief Operating Officer Gregg Martin. Government attorneys contended that Martin's testimony would have supported their claim that Tuomey was aware that its physician contracts might be illegal. Perry instructed the government to ensure that the $44.9 million judgment against Tuomey is offset if the government wins any additional monies in a new FCA trial.

To learn more:
- read these articles from The Item: report 1 and repor t2
- read this article from The State
- discover some legal firms' takes on recent changes to the Stark Law here, here or here

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