A federal court ordered Tuomey Healthcare System to pay $237,454,195 after a jury found that it had violated the Stark Law (restricting physician referrals and payments) and the False Claims Act (FCA) when it submitted 21,730 false claims involving physicians with whom it had financial relationships that violated the Stark Law.  United States ex rel. Drakeford v. Tuomey d/b/a Tuomey Healthcare System, Inc., C/A No. 3:05-2858-MBS (D. S.C. Oct. 2, 2013).

The case began as a qui tam action and the government later intervened.  The complaint alleged that Tuomey entered into employment agreements with physicians that were not consistent with fair market value or commercially reasonable.  The jury found that the contracts violated the Stark Law and that Tuomey violated the FCA when it submitted 21,730 claims in connection with these prohibited contractual arrangements.  The court entered judgment under the FCA in the amount of $237,454,195, plus interest.

This case highlights the importance of carefully reviewing physician arrangements with counsel to ensure compliance with the Stark Law.  It also exemplifies the need to attempt to resolve these cases before trial to avoid the substantial damages available under the FCA, which can put most healthcare entities out of business.

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Photo of Michael R. Bertoncini Michael R. Bertoncini

Michael R. Bertoncini is a principal in the Boston, Massachusetts, office of Jackson Lewis. He is a member of the Healthcare industry group and a member of the Higher Education group.

With a background as a former Deputy General Counsel, Michael understands first-hand…

Michael R. Bertoncini is a principal in the Boston, Massachusetts, office of Jackson Lewis. He is a member of the Healthcare industry group and a member of the Higher Education group.

With a background as a former Deputy General Counsel, Michael understands first-hand the competing demands and unique challenges faced by in-house counsel. Before joining Jackson Lewis, he was responsible for all labor and employment law matters for the largest fully integrated community care hospital system in New England. Michael provides timely, practical advice that helps clients achieve their strategic goals while ensuring compliance with legal obligations.

With deep experience in a broad range of industries, Michael has a keen interest in the healthcare, higher education, museum, and arts & music sectors. He is dedicated to supporting clients in these areas, leveraging his extensive experience to address the specific challenges faced by institutions and organizations in these fields.

Michael regularly partners with clients to establish positive employee relations. In labor relations matters, he negotiates collective bargaining agreements on behalf of organized clients, represents clients in labor arbitrations and National Labor Relations Board proceedings, and counsels clients with respect to rights and obligations under collective bargaining agreements and applicable labor and employment laws. He also has extensive experience in advising organizations responding to corporate campaigns and negotiating neutrality agreements.

Michael’s privacy and data security practice focuses on advising clients on complying with HIPAA and other state and federal privacy and data security laws. He reviews and develops policies and procedures, written information security plans and integrated compliance programs to ensure his clients meet their obligations under privacy and data security laws. Michael represents clients in investigations of alleged data breaches and advises them on reporting obligations.. He also conducts workplace training programs on HIPAA compliance and related privacy and data security topics.