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What Went Wrong at Tuomey Healthcare System

by Mark R. Fitzgerald
Powers Pyles Sutter & Verville, PC - Washington Office

October 17, 2013

Previously published on October 11, 2013

In a decision dated September 30, 2013, the U.S. District Court for South Carolina entered judgment against Tuomey Healthcare System (“Tuomey”) for a total of $237.5 million for violating the Stark law and the False Claims Act (“FCA”).  The judgment is the latest landmark in this litigation, which has spanned eight years and two jury trials.  The case is significant, not only for the size of the judgment, but also because it points to a new criterion for determining when a compensation arrangement will be considered to exceed fair market value.  This criterion - a requirement that the compensation not exceed the expected professional collections to the hospital - is not evident in any prior CMS commentary on the Stark law, but needs to be considered in any future valuations.


The views expressed in this document are solely the views of the author and not Martindale-Hubbell. This document is intended for informational purposes only and is not legal advice or a substitute for consultation with a licensed legal professional in a particular case or circumstance.

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