Tuomey will pay 72 million
has agreed to pay $72.4 million to settle its case with the U.S. government regarding illegal compensation arrangements with doctors. A federal jury found in 2013 that Tuomey had violated the False Claims Act by submitting tens of thousands of illegal claims to Medicare in which doctors were being compensated for referring patients, which is a violation under the Stark Law. Tuomey agreed to the settlement after suffering three defeats in federal court.
The settlement amount is less than a third of $237 million penalty determined by a federal appeals court. The original verdict would have been the largest penalty levied against a community hospital and would have exceeded Tuomey’s annual revenue. Tuomey is a not-for-profit system with its largest facility being the only hospital in Sumter, South Carolina. However, the settlement includes that Tuomey will be sold to Palmetto Health based in Columbia, South Carolina. Tuomey had indicated its intent to partner with Palmetto prior to the settlement.
The case against Tuomey originated from Dr. Michael Drakeford, who declined to enter an agreement with the hospital. Dr, Drakeford will receive $18.1 million from the settlement as whistle blowers are entitled to receive a percentage of the penalty in successful False Claims Act cases.