The jury in the Tuomey case (U.S. ex rel. Drakeford v. Tuomey Healthcare Systems, Inc.) returned a verdict in favor of the government yesterday, May 8, 2013. As is well known, this is the re-trial of a case centered on a series of employment agreements that Tuomey Healthcare entered to allegedly capture referrals from a number of physicians to the hospital’s ambulatory surgery center. The jury found the hospital liable for violating both the Stark Law and the False Claims Act. The jury further found that 21,730 claims were filed by the hospital in violation of the False Claims Act and the total monetary value of those claims was $39,313,065. Under the False Claims Act, the federal government can recover from $5,500 up to $11,000 per false claim and up to 3 times the monetary value of those claims. That results in potential liability for Tuomey ranging from $119,515,000 to $239,030,000 on the per claim penalty plus up to $117,939,195 under the treble damages provision. In other words, Tuomey faces potential penalties of up to $356,969,195 on this verdict. To put this in perspective, Tuomey Healthcare’s Form 990 for the fiscal year ending September 30, 2011 showed net assets of $123,540,611.
This verdict has significant implications not only for Tuomey Healthcare, but also for the entire healthcare industry. Look for additional posts examining the details of the case and the implications of this decision in the coming weeks. For additional information, please contact David Pursell or Brian Bewley.
You can access the Jury Verdict Form here: Tuomey Verdict.