South Carolina-based Tuomey Healthcare System agreed to pay $72.4 million to settle charges of violating the False Claims Act by billing Medicare for services referred by physicians with whom the hospital had improper financial relationships. Under the settlement, Tuomey also will be sold to Palmetto Health, a multi-hospital healthcare system based in Columbia, South Carolina. According to the government, Tuomey violated the Stark law by entering into contracts with 19 specialist physicians that required them to refer their outpatient procedures to Tuomey in exchange for compensation that far exceeded fair market value and included part of the money Tuomey received from Medicare for the referred procedures. The settlement follows a jury trial where the court entered judgement against Tuomey for more than $237 million. The case arose from a whistleblower lawsuit filed under the qui tam provisions of the False Claims Act by Dr. Michael K. Drakeford, an orthopedic surgeon who was offered, but refused to sign, one of the illegal contracts. Dr. Drakeford will receive a whistleblower award of roughly $18.1 million from the settlement. Whistleblower Insider
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