Whistleblower Receives $18 Million Under the False Claims Act

On July 2, 2016 a federal appeals court upheld a False Claims Act verdict in the sum of $237 million dollars. The verdict was against the Tuomey Healthcare System in Sumpter, S.C. The verdict exceeds the hospital’s yearly income and is believed to be the largest fine ever against a community based hospital.

The verdict against Tuomey stems from violations of the Stark Law. The Stark Law prohibits hospitals from charging Medicare for certain services or procedures that have been referred by doctors that have an improper financial agreement with the hospital. The Stark Law requires that payments made by a hospital to a referring physician be at the fair market value for the physician’s actual service. Under the Stark Law, the volume or value of the referrals, to the hospital, are not allowed to be taken into account for compensation purposes.

In this case, Tuomey Regional Medical Center allegedly feared that it would lose substantial outpatient procedure referrals to a new surgery center. The hospital entered into contracts with 19 specialist physicians. These contracts required the physicians to refer their outpatient procedures to Toumey. Toumey, in exchange, paid the physicians compensation that was well beyond fair market value. Part of the compensation paid to the physicians was money received from Medicare for the referred medical procedures.

The case against Tuomey was initiated by orthopedic surgeon Dr. Michael K. Drakeford in October 2005. Dr. Drakeford was offered, but refused to sign, one of the illegal agreements from Tuomey. Dr. Drakeford’s claim was filed under the qui tam, or whistleblower, provisions of the False Claims Act. These provisions allow for citizens to sue on behalf of the government for false claims. They also allow for the individual to share in any money recovered from the defendant. The False Claims Act permits the government to assist in or take over the case. Under the terms of the settlement between the federal government and Tuomey Healthcare System, Dr. Drakeford will receive over $18 million for reporting the violations.

The medical billing fraud lawyers of Lutz, Bobo & Telfair, P.A. represent plaintiffs in qui tam cases under the False Claims Act. If you or someone you know have knowledge of healthcare professionals committing Medicare / Medicaid fraud, call 866-802-8112 today or email the lawyers of Lutz, Bobo & Telfair, P.A. We offer no cost consultations for all qui tam claims. We also take Medicare / Medicaid billing fraud cases on a contingency basis. This means you owe us no attorney’s fees unless we settle your claim or win a favorable verdict in court.

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