A spokeswoman declined to comment on whether the departures are related to the system's ongoing legal woes, which have consumed untold millions of dollars in legal fees, even as the 242-bed hospital shows no outward of sign of accepting federal prosecutors' offers for settlement talks.
Sumter Mayor Joe McElveen publicly called on the hospital's board members this week to reevaluate their legal strategy before Tuomey is “swallowed up” in an acquisition. “It is a charitable hospital with a tax exemption because it is supposed to use its resources for public good, not litigation,” McElveen's wrote in an opinion column in the local newspaper, The Item.
Tuomey was targeted in a 2005 whistleblower lawsuit filed by a local physician, Dr. Michael Drakeford, who claimed system executives were trying to lure him and other doctors into contracts that would financially reward them for referring Medicare patients for treatments at the hospital, which is generally illegal. Federal prosecutors soon joined the case against Tuomey for alleged violations of the Stark law and the False Claims Act.
Although such lawsuits are not uncommon in healthcare, Tuomey, led by Cox and Martin, did what virtually no other hospital in the U.S. has done in a Stark law case—fighting the government all the way to trial instead of settling. And they did it twice.
The first trial in 2010 resulted in a complicated split verdict that was overturned on appeal. During a second trial this year, jurors found Tuomey liable for submitting 21,730 claims for Medicare patients worth $39 million that were tainted by illegal agreements with 19 doctors. Each claim is considered a separate violation punishable by at least $5,500 in penalties, plus repayment of up to three times the total amount paid by Medicare.
That means $237 million is actually the minimum possible penalty Tuomey faces, prosecutors said in legal filings in U.S. District Court in a motion for damages against Tuomey. Given that high amount, prosecutors said in the public filings that they were still interested in reaching a settlement.
The judge in the case has yet to rule on a final damages figure, delaying the deadline several times. Characteristic of the case, dozens of motions, responses and replies-to-responses have been filed contesting the particulars of the damages figure. Tuomey officials continue to maintain that the contracts were legal, and that they relied on the advice of lawyers in drafting them.
Tuomey posted a $13 million margin on $202 million in total revenue in the fiscal year ended Sept. 30, 2011, according to the most recent public information available. Law firm Nexsen Pruet was the hospital's third-highest-paid contractor that year, with more than $1 million in “consulting” payments. Tuomey racked up another $459,000 on other legal expenses during that period, the filing says.
Follow Joe Carlson on Twitter: @MHJCarlson
