Government joins in Qui Tam suit against South Carolina Tuomey Healthcare System

Tuomey Healthcare System in Sumter, South Carolina is the subject of a lawsuit filed under the False Claims Act, and now joined by the federal government. The case involves job contracts offered to a group of physicians by the Tuomey Outpatient Surgery Center, which contracts are claimed to violate the Stark Law. The federal Stark statutes were enacted to prevent a doctor from referring patients to a medical facility in which the physician has any sort of financial interest, whether by direct ownership, investment, or by a structured compensation agreement. The practice involves an inherent conflict of interest, in view of the doctor’s position to benefit financially from the referral. Critics charge that such referrals encourage the over-utilization of medical services, which unnecessarily raises health care costs.

Dr. Michael Drakeford, an orthopedic surgeon working with the physicians, filed a whistleblower lawsuit under the federal False Claims Act, which permits a private citizen to file a fraud claim on the government’s behalf. Under the Qui Tam section of the statute, the individual may share in a portion of any recovery as a result of the suit. Dr. Drakeford had notified the hospital in a letter of his concerns that the offered contracts would violate the Stark Law and the False Claims Act.

Trial in the matter is scheduled for September 2009.

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