WASHINGTON (Legal Newsline) — The Department of Justice has announced Ralph J. Cox III, former CEO of Tuomey
Healthcare System in South Carolina, will pay $1 million for his alleged
involvement in a Medicare and Medicaid scheme.
Tuomey Healthcare System allegedly billed Medicaid and
Medicare for services referred by physicians with whom the hospital had
improper financial relationships.
“Sweetheart deals between
hospitals and referring physicians distort medical decision making and drive up
the cost of health care for patients and insurers alike,” said principal deputy
assistant attorney general Benjamin C. Mizer, head of the Justice Department’s
“Patients have a right to be confident that a physician
who orders a procedure or test does so because that service is in the patient’s
best interest, and not because the physician stands to gain financially from
Allegations against Cox relate to the Stark Law, which
exists to make sure that, in general, any payments made by a hospital to a
referring physician be at fair market price and not take into account the
volume of referrals the physician brings.