- Ralph J. Cox III, the former CEO of Tuomey Healthcare System, has reached a $1 million settlement for involvement in the Medicare and Medicaid billings in violation of the Stark Law, the U.S. Department of Justice announced on Tuesday.
- Under the terms of the settlement agreement, Cox will also be excluded for four years from participating in federal healthcare programs, including providing management or administrative services paid for by federal healthcare programs.
- Last October, the United States resolved its judgment against Tuomey for payments totaling $72.4 million, and the hospital was sold to Palmetto Health, a multi-hospital healthcare system based in Columbia, South Carolina.
A federal jury in May 2013 found the company violated the False Claims Act by submitting more than 21,000 false claims with Medicare claims. The trial court in October 2013 entered a judgment under the False Claims Act in favor of the United States for $237.4 million. A federal appeals court upheld the decision in July. Cox was terminated as Tuomey’s CEO in the fall of 2013.
While the case is relatively old, the settlement serves as a grim reminder that the federal government is cracking down on Medicare and Medicaid false claims and medical billing fraud. Since January 2009, the Justice Department has recovered a total of more than $30.7 billion through False Claims Act cases, with more than $18.5 billion of that amount recovered in cases involving fraud against federal health care programs. That Cox will be forking over his own money should be sobering for hospital CEOs to make sure their organizations are not accidentally violating federal laws such as Stark.