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Jennifer Y. Chow / 11/15/2013 / Twitter / Facebook
In October of 2005, Dr. Michael Drakeford, a specialist physician for whom negotiations were unsuccessful, filed a qui tam action under the FCA.  In September of 2007 the United States joined that action.  In the lawsuit, the government alleged that Tuomey knowingly presented, or caused to be presented, false and fraudulent claims for payment in violation of Stark Law.  The United States also alleged that Tuomey was not entitled to receive payment from the United States for services rendered by a physician who was in a prohibited financial relationship under the Stark Law and that Tuomey was compensated as a result of mistaken belief.  Finally, the United States alleged that Tuomey was unjustly enriched by obtaining government funds, to which it was not entitled. 
The case was tried before a jury. The jury found that the arrangements violated the Stark Law and that Tuomey was liable for $41 million in Medicare overpayments, but not accountable under the False Claims Act.  The District Court granted the government’s motion to vacate the jury verdict on the False Claims Act.  The Court of Appeals for the Fourth Circuit ruled that by vacating a portion of the jury verdict, the District Court violated the defendant’s Seventh Amendment right and vacated the entire verdict.  The Court remanded for a new trial.  In May of this year, a jury at the District Court found that Tuomey violated Stark Law and the FCA by submitting $39 million in improper claims.  As the government is entitled to treble damages, civil penalties alone amounted to nearly $120 million.  The jury found that the contracts took into account the volume or value of referrals and created a prohibited financial relationship between Tuomey and the physicians.  The district court reject Tuomey’s arguments that the government failed to prove the physician contracts were subject to Stark Law and that treble damages were excessive under the Eighth Amendment.  As of this writing, the matter has not yet reached its final conclusion.  As the costs of Stark violations can be so financially devastating, Stark cases that go to court are cautionary tales. 
 United State ex rel. Drakeford v. Tuomey, 2013 WL 5503695, at *15 (D.S.C. Oct. 2, 2013).
 31 U.S.C. § 3729 et seq.
 42 U.S.C. § 1395 et seq.
 Tuomey, 2013 WL 5503695, at *2.
 Id. at *1.
 Id. at *3.
 Id. at *4.
 Id. at *5.
 Id.; See 31 U.S.C. §3729(a).
 Tuomey, 2013 WL 5503695, at *7.
 Id. at *18.
 Andrew M. Ballard, Court Orders Tuomey Healthcare System to Pay $227M for Stark, FCA Violations, Bloomberg BNA, (Oct. 2, 2013), http://news.bna.com.ezproxy2.lib.depaul.edu/mdln/MDLNWB/split_display.adp?fedfid=36985676&vname=mcrnotallissues&jd=a0e2e2n2u8&split=0 (citing chairman of Tuomey’s board stating a notice of appeal is to be filed and a request for a stay of judgment, pending appeal).
 See United States ex rel. Baklid-Kunz v. Halifax Hosp. Med. Ctr., 2012 WL 921147 (M.D. Fla. Mar. 19, 2012); United States ex rel. Singh v. Bradford Reg’l Med. Ctr., 752 F. Supp. 2d 602 (W.D. Pa. 2010); United States ex rel. Villfane v. Solinger, 543 F. Supp. 2d 678 (W.D. Ky. 2008).