SC hospital could face millions in fines

COLUMBIA - A South Carolina hospital that a jury says had an improper relationship with some of its doctors could be asked to pay the federal government nearly $45 million in damages, multiple media outlets reported today.

After a four-week trial, a federal jury in Columbia on Monday rejected prosecutors' claims that Tuomey Hospital in Sumter jacked up profits by submitting hundreds of millions of dollars in fraudulent Medicare claims.

But jurors ruled that the hospital did break the law by entering into agreements with part-time doctors working in the hospital's outpatient surgery center. The jury agreed with prosecutors that the hospital hired the doctors to run the center, with the idea the doctors would then refer patients to the center.

That practice is prohibited under Stark Law, which prohibits doctors from referring business to hospitals in which they have a vested financial interest.

Dr. Michael Drakeford brought the lawsuit as a whistleblower, saying in a complaint filed under seal in 2005 that the hospital had knowingly entered into unreasonable employment agreements "that provided for compensation in excess of ... the fair market value of the services provided."

The government had been seeking to recover $277.5 million for allegedly fraudulent Medicare claims. Now, Assistant U.S. Attorney Norman Acker said the government wants nearly $45 million in damages for the improper patient referrals. U.S. District Judge Matthew Perry is expected to rule on that request after briefs are submitted in the next two weeks.

In a statement, Tuomey chief executive Jay Cox called the jury's split decision a victory for the hospital.

"Tuomey is extremely pleased with the jury's decision," Cox said. "It was always our intention to provide the best health care services to the Sumter community."

Drakeford was eligible for 15 percent to 25 percent of any money recovered from the hospital. Whether he would get a part of the $44.8 million is unknown, but Drakeford said his part in the lawsuit was never about money.

"I wasn't going to get any money to begin with," he said, having set up a nonprofit foundation to medically serve needy families in the area.

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