Tuomey Healthcare warns it will close if forced to pay $237.5M Medicare fraud judgment

Lawyers for a Sumter, S.C., hospital slapped with a $237.5 million federal judgment in a Medicare fraud case in October say the hospital may close if it is forced to pay the entire amount, according to local news reports.

Last spring a jury found Tuomey Healthcare System guilty of paying kickbacks to doctors for referrals, leading to the October judgment, FierceHealthFinance previously reported. Tuomey at the time indicated plans to appeal.

Attorneys for the hospital system now are asking the judgment to be set aside until its appeal is heard, WISTV reported last week. Paying the entire judgement is "a fiscal impossibility" that would cause the hospital to shut down, Tuomey lawyers argued in the motion.

"If the Government is allowed to execute upon the judgment before Tuomey's right to appellate review is exhausted, Tuomey will be financially ruined and the people of Sumter and (nearby) Shaw Air Force Base will suffer irreparable harm," according to the motion.

WISTV reported that the federal government agreed to hold off on collecting full judgment during settlement discussions. The hospital deposited $50 million into an escrow account, according to court documents, described as "approximately $20 million more than Tuomey can afford to ultimately pay and remain in business."

The closest hospital is about 20 miles away, according to the television station's report.

During the trial Tuomey was found to have submitted more than 20,000 false Medicare claims, Becker's Hospital Review reported, citing an article published by the Sumter newspaper, The Item.

Meanwhile, indictments are piling up in another case of alleged hospital Medicare fraud. In October a federal grand jury in Chicago indicted the former chief operating officer and the former vice president over marketing at the now-closed Sacred Heart Hospital in Chicago, alleging conspiracy to pay kickbacks to providers referring Medicare and Medicaid patients to the hospital. A physician was charged with accepting kickbacks, allegedly disguised as lease and consulting payments. Five others, including the hospital's owner, were arrested and indicted earlier in the year.

The U.S. Justice Department says it recovered $2.6 billion in healthcare fraud in fiscal 2013 in civil cases filed under the False Claims Act, including Medicare and Medicaid fraud. Fraud cases investigated under the Act return $20 for every $1 invested in them, as FierceHealthPayer reported.

For more information:
- here's the WISTV report
- read The Item's article (subscription required)
- check out the Becker's Hospital Review account
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