The lawsuit seeks $117 million in damages for “misleading and reckless advice” by the law firm.
In its suit, Tuomey claims relying on Nexsen Pruet’s advice caused the hospital to lose a federal whistle-blower lawsuit in 2013. In May 2013, a jury found Tuomey violated Stark Law and the False Claims Act by submitting $39 million in false claims to Medicare and compensating physicians for referrals. A $237.5 million judgment was entered against Tuomey, which was comprised of damages of $117.9 million and civil penalties of $119.5 million. After the judgment was upheld on appeal, Tuomey settled with the federal government. Under the terms of the agreement, Tuomey paid $72.4 million to settle the case and folded into Columbia, S.C.-based Palmetto Health.
Tuomey initially hired Nexsen Pruet in 2000 to create contracts for Sumter-area physicians to prevent them from performing outpatient surgeries at locations other than Tuomey. According to legal documents, Tuomey faithfully relied on Nexsen Pruet’s advice and entered into 19 contracts with local physicians from 2005 to 2007.
Although lawyers at the firm told Tuomey the contracts were legal, they were later found by a jury to have violated Stark Law. Tuomey’s suit against the law firm alleges that Nexsen Pruet did not accurately communicate the risks of entering into such contracts and blocked the Tuomey board of directors’ efforts to learn more about the contracts.
According to the lawsuit, Nexsen Pruet continued to represent Tuomey in all legal issues, including the 2013 jury trial, where lawyers “insist[ed] that the government would lose.”
Tuomey officials allege that the hospital paid the law firm $15 million for its allegedly bad advice and needless litigation-related expenses.
Nexsen Pruet Board Chairman Leighton Lord said in a statement that the firm was “very disappointed with results of the almost decade-long dispute with the federal government. [The firm] stood by Tuomey through that dispute and we are disappointed in, and disagree with, the recently filed lawsuit,” Mr. Lord said, according to The State.
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