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Tuomey, Palmetto Health looking at partnership

Sumter, S.C.-based Tuomey Healthcare System is considering a merger with Palmetto Health, a health system in Columbia, S.C.

Tuomey officials said the system's 266-bed hospital might have to be shut down if the system has to pay $237 million in fines related to a 2013 federal trial, according to a report by The State.  

In May 2013, a jury found Tuomey violated Stark Law and the False Claims Act by filing $39 million in false claims to Medicare and compensating physicians for not referring patients to competing hospitals or physicians. As a result, a judgment was entered against Tuomey in the amount of $237 million. A federal district court inSouth Carolina  subsequently ordered Tuomey to pay $70 million to delay payment on the $237 million judgment previously entered against it until an appeal of the case is completed.

In a news release, Tuomey said its board of trustees and administrators went through the process to determine what action was best for the future of Tuomey and healthcare in the Sumter area. In the end, they determined the best scenario was a partnership with a health system.

Tuomey's criteria for a potential partner included "high standards of quality, access to additional capital, helping increase the number of local physicians and specialties, and the ability to handle the changes associated with the Affordable Care Act."

"We are working hard to make sure we do what is in the best interest of Sumter, our employees and our physicians," Tuomey Board Chairman John Brabham said in a news release. "Starting these negotiations with Palmetto Health is absolutely a step in the right direction."

Palmetto Health CEO Charles D. Beaman Jr. said in the release that Palmetto believes Tuomey would be an excellent partner for Palmetto, as the two have highly complementary cultures and are in close proximity to each other.

Any agreement is subject to extensive negotiations and regulatory approval.

 

More articles on transactions and valuation issues:

Emory, WellStar in discussions to create new health system

10 recent hospital transactions and partnerships

University of Iowa Hospitals and Clinics to purchase Iowa City Heart Center for $1.2 million

 

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