- A federal appeals court on Thursday upheld a $237-million False Claims Act decision against Tuomey Healthcare System, a community health system in Sumpter, SC.
- The figure outweighs the hospital's annual revenue and is estimated to be the largest such fine ever applied to a community hospital.
- The hospital said it will continue settlement discussions with the government and weigh its legal options going forward.
As a remider: This case has been going on for 10 years and Toumey has lost in twice in US District Court. A federal jury ruled in 2013 that the hospital submitted 21,730 false claims to Medicare worth $39.3 million, and that the hospital paid physicians in such a way that violated the Stark Law. Tuomey says it was following the advice of its lawyers. One counsel raised concerns—conerns which the court says the hospital should have given more credence.
Even though the appeals court sided with the lower court, the judge who wrote the opinion, Judge Albert Diaz, called the case "troubling."
"It seems as if, even for well-intentioned healthcare providers, the Stark law has become a booby trap rigged with strict liability and potentially ruinous exposure—especially when coupled with the False Claims Act," Diaz wrote.
In other words, even though the hospital may have been acting in good faith, the buck stops here when it comes to False Claims liability. More specifically, says Daniel Melvin (McDermott Will & Emergy), the decision may suggest that providers are putting themselves at more risk by obtaining more than one legal opinion when making decisions governed by Stark.
"If the second opinion is more favorable and you decided to go with the favorable opinion, are you now going to have some risk of not acting in good faith because you disregarded or didn't follow the advice of the negative opinion?" Melvin said.