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Tuomey reviewing settlement offer from U.S. in Medicare fraud suit

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By Chuck Crumbo
Published Oct. 2, 2015
Tuomey Healthcare System said it’s reviewing an offer from the U.S. government to settle a $237 million lawsuit as the Sumter hospital works toward finalizing a partnership agreement with Palmetto Health.

“Tuomey Healthcare System and Palmetto Health are applying their best efforts toward finalizing our binding agreement,” Michelle Logan-Owens, president and CEO of Tuomey, said Thursday, the original deadline for inking an agreement.

“While most documents necessary to achieve the partnership have been completed, a few details remain before we can sign. We are optimistic that these will be completed very soon,” Logan-Owens said.

Tuomey, a not-for-profit operator of a 301-bed hospital, was ordered two years ago by a federal judge to pay the government $237 million in damages after the court found that the health care system’s doctors had collected $39.3 million in fraudulent Medicare claims between 2005 and 2009.

Having to pay such a hefty fine threatened to shutter the hospital system and efforts have been under way to reach a settlement.

Last Friday, Sept. 25, Tuomey received a draft proposed settlement from the U.S. Department of Justice, Logan-Owens said. “Our attorneys are reviewing it now and are in consultation with us regarding the rights, obligations, and duties contained in the draft settlement,” she added.

On Thursday, the Justice Department filed a motion asking the U.S. District Court to delay disbursement of a $40 million bond for the judgment.

“The parties continue to be engaged in serious and substantial negotiations, but need until approximately” Oct. 9 to conclude talks, the document said.

“Tuomey has informed the United States that if a settlement is not reached, it intends to file for protection in Bankruptcy Court,” the document said.

Tuomey announced in February that its board had voted to seek a partnership agreement with Palmetto Health and on Sept. 11 the two health care systems announced that they were progressing toward a deal.

“We fully expect to reach our definitive agreement by Oct. 1 and begin 2016 together as one,” Palmetto Health CEO Charles Beaman said in September, announcing that the Palmetto Health Board of Directors and Palmetto Health’s two sponsoring boards – the Richland Memorial Hospital Board and the Baptist Healthcare System Board – unanimously voted to make Tuomey a member of Columbia-based health care system. “This historic combination will bring together two long-standing institutions that share complementary cultures and a focus on delivering outstanding patient care.”

Palmetto Health operates a 1,138-bed system at three hospitals in the Columbia area, providing care for 70% of Richland County residents and more than 55% of the health care for the combined Richland/Lexington county area.

Reach Chuck Crumbo at 803-726-7542.

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