Federal Jury Rules South Carolina's Tuomey Hospital Violated Stark Law But Not False Claims Act

A federal jury has found Tuomey Hospital in Sumter, S.C., part of Tuomey Health System, guilty of violating the Stark Act, according to a report by the Sumter Item.

Federal prosecutors alleged that beginning in 2004 the hospital violated federal healthcare law by offering part-time and other employment contracts to physicians for its Outpatient Surgery Center.

Federal prosecutors also alleged Tuomey violated the False Claims Act by submitting claims resulting from referrals that violated self-referral law. However, the jury dismissed this claim, clearing the hospital of Medicare fraud charges.

The case stemmed from a qui tam suit filed by Michael Drakeford, MD, a local physician who was offered a contract but refused the hospital's offer.

The government is seeking nearly $45 million in damages for the hospital's Stark violation — much less than the $277.5 million that hospital may have been liable for had it been found guilty of submitting false claims.

The hospital has filed a motion to assert no money should be recovered to which prosecutors must respond, according to the report.

The case is reflective of both increased efforts by hospitals to align with physicians and increased efforts by the federal government to assure such arrangements comply with the stark and antikickback statutes.

Contact Lindsey Dunn at lindsey@beckersasc.com.

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