SC hospital found guilty of $39M in false claims

| May 9, 2013

COLUMBIA, S.C. (AP) — A South Carolina hospital has been found guilty of collecting millions of dollars in false Medicare claims.

After a four-week trial in Columbia, a federal jury on Wednesday found that Tuomey Healthcare System signed doctors to lucrative, part-time contracts to ensure that they would get referral fees associated with those physicians' procedures, according to a report by The Item of Sumter (http://bit.ly/10urxfq).

Paying physicians with part of the referral fees a hospital receives creates an illegal kickback under Medicare law. The contracts did not spell out the referral agreement, but prosecutors said the hospital agreed to pay those doctors well above market value.

Tuomey's lawyers argued the contracts were legal and were part of the hospital's effort to provide services to a medically underserved community.

Prosecutors said Tuomey collected $39 million in fraudulent Medicare claims between 2005 and 2009 based on those doctors' procedures, according to the government. On top of that amount, a federal judge has ordered both sides to submit petitions on any additional penalties, fees and fines.

Tuomey has several weeks to decide if it will appeal. In his closing arguments, defense lawyer Matthew Hubbellsaid a verdict against Tuomey would "annihilate" the hospital.