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30 September 2016

Fallout From Tuomey Continues: Ex-CEO Agrees To $1M Fine, Exclusion

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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.
United States Food, Drugs, Healthcare, Life Sciences
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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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