A federal appeals court on Thursday upheld a $237 million judgment against a Sumter hospital accused of filing false Medicare claims in a kickback case.
A three-judge panel of the 4th U.S. Circuit Court of Appeals unanimously rejected Tuomey Healthcare System’s challenge to a 2013 federal finding. The jury determined Tuomey had signed doctors to lucrative, part-time contracts from 2005 to 2009 to ensure that the hospital would get referral fees from procedures those physicians performed on Medicare patients. Federal law considers such an arrangement to be an illegal kickback.
The jury found that Tuomey improperly submitted nearly 22,000 false claims to Medicare worth $39 million under that arrangement. The government was awarded additional damages and civil penalties bringing the total to $237 million.
A year earlier, a separate jury cleared the hospital of any wrongdoing. But the judge determined he had improperly excluded some testimony and ordered a new trial.
The hospital’s attorneys had argued in their appeal filings that the penalty was excessive, saying the $237 million price tag could cause the hospital to close. The hospital is already working on a potential merger with Columbia-based Palmetto Health in an effort to stay open.
Following Thursday’s ruling, hospital President and CEO Michelle Logan-Owens said she was disappointed with the outcome. “However, for more than 100 years we have been providing healthcare services in this community, and we stand firm in our resolve to continue our mission,” she posted in a statement. “I am confident that we will find an appropriate resolution which will allow Tuomey to close this chapter and emerge strongly and successfully in our potential collaboration with Palmetto Health.”
The hospital has 45 days to request a reconsideration of the case, should they choose to take that step.
Tuomey Healthcare has about 1,700 employees.