Ralph J. Cox III, the former CEO of Tuomey Healthcare System,
has reached a settlement with the U.S. Department
of Justice (DOJ) under which he will personally pay $1 million and
be excluded from participating in federal healthcare programs
for four years. Tuomey is a South Carolina hospital system that
previously settled a government lawsuit over illegal Medicare and
Medicaid billings. The Cox settlement resolved allegations that he
caused Tuomey to enter into physician contracts that violated the
Stark Law.
Cox's settlement is in addition to the $237 million jury
verdict against the hospital for illegal billings for services
referred by doctors with whom the hospital had improper financial
relationships. The judgment was later reduced to $72.4 million
in a deal with the DOJ under which Tuomey was sold to Palmetto
Health, a multi-hospital system in South Carolina. During the
Tuomey trial, the government said Cox ignored warnings from one of
Tuomey's lawyers that the physician contracts were
"risky" and raised "red flags."
This settlement illustrates the government's continued emphasis
on combating healthcare fraud and marks another achievement for the
Health Care Fraud Prevention and
Enforcement Action Team (HEAT), a joint initiative of DOJ, the
Office of Inspector General, and the Department of Health and Human
Services.
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