Tuomey’s Appeal of $237M False Claims Act Judgment Denied by the Fourth Circuit

Posted In Stark

The US Court of Appeals for the Fourth Circuit affirmed the trial court’s May 2013 decision that Tuomey Healthcare System, Inc., a hospital and health system based in Sumter, South Carolina, submitted 21,730 false claims, claims prohibited by the Stark Law, to the Medicare program. The court rejected Tuomey’s request for a new trial based on multiple errors by the trial court and Tuomey’s constitutional challenges to the trial court’s award of damages and civil penalties totaling $237 million. Although concurring with the Fourth Circuit’s opinion, Judge Wynn described this case as “troubling,” explaining that “even for well-intentioned health care providers, the Stark Law has become a booby trap rigged with strict liability and potentially ruinous exposure–especially when coupled with the False Claims Act.” United States ex rel. Drakeford v. Tuomey, No. 13-2219, 2015 U.S. App. LEXIS 11460, at *69 (4th Cir. Jul. 2, 2015) (Wynn, J., concurring).

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Daniel H. MelvinDaniel H. Melvin
Daniel H. Melvin counsels clients on Stark, Anti-Kickback and Medicare compliance issues such as physician compensation matters, and assists clients in investigating and addressing potential or alleged violations, including self-disclosures and defense of Stark- and Anti-Kickback-related qui tam actions. He also works with hospitals and physicians on coordinated care and other alternative service delivery models, including bundled payment and cost savings models, providing regulatory and transactional counsel and support. Read Daniel H. Melvin's full bio.


Eric B. Gordon, MDEric B. Gordon, MD
Eric B. Gordon advises clients on fraud and abuse and compliance issues and health care transactions. He is partner-in-charge of the California Health Industry Practice Group. Eric represents a wide range of clients, including proprietary and tax-exempt hospital systems, medical groups, academic medical centers and faculty practice groups, pharmaceutical companies and medical device manufacturers, and group purchasing organizations. Read Eric B. Gordon's full bio.


Tony MaidaTony Maida
Tony Maida counsels health care and life sciences clients on government investigations, regulatory compliance and compliance program development. Having served as a government official, Tony has extensive experience in health care fraud and abuse and compliance issues, including the federal and state Anti-Kickback and Stark Laws and Medicare and Medicaid coverage and payment rules. He represents clients in False Claims Act (FCA) qui tam matters, government audits, civil monetary penalty and exclusion investigations, and Centers for Medicare and Medicaid Services (CMS) suspension, and revocation actions, negotiating and implementing corporate integrity agreements, and making government self-disclosures. Read Tony Maida's full bio.


T. Reed StephensT. Reed Stephens
T. Reed Stephens represents clients in the life sciences industry, including pharmaceutical and biotech manufacturers, wholesalers and individuals, as well as health care systems and non-health care related companies in other global industries such as the defense and financial services/banking sectors. He also represents clients in matters involving state and federal government law enforcement, voluntary disclosures and congressional investigations. Read T. Reed Stephens' full bio.

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