Court says Tuomey must pay $30 million in 10 days

Published: Apr. 11, 2014 at 3:23 PM EDT
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COLUMBIA, SC (WIS) - A federal court has ordered a Sumter hospital to pay a $30 million bond within 10 days.

The order was issued Thursday to Tuomey Healthcare System as part of the lawsuit filed against Tuomey for violating federal Medicare and Medicaid laws.

Earlier this year the court ordered Tuomey to pay $237 million in damages, but the hospital said paying that amount would force it into bankruptcy. So federal officials ordered Tuomey to pay $70 million dollars while waiting on the appeal.

"Tuomey's motion for a stay pending appeal is granted as follows," reads the court documents. "Tuomey shall obtain a supersedeas bond or equivalent in the amount of $30,000,000 within ten days of the date of entry of this order. Tuomey and the government also shall enter into an escrow agreement composed of similar mutually-agreeable terms as that entered into between the parties in 2010 (ECF No. 898-1) in the amount of $40,000,000."

A supersedeas bond, or defendant's appeal bond, is required by the court if the defendant wants to delay payment on a judgement until an appeal is completed. U.S. District Judge Margaret Seymour says the $30 million can be deposited into an interest-bearing account until the court makes a ruling.

Earlier this year, Tuomey officials said the system will have to file bankruptcy if it pays $70 million requested by the federal government while it waits for an appeal.

The hospital was found guilty in May of violating the so-called Stark Law and the False Claims Act. The court ordered the hospital to pay $237 million in damages. After Tuomey officials said it could be forced to close if it paid that total, federal officials asked for a $50-million bond and $20 million in escrow while the appeal process continues.

Tuomey said that its only option is to file bankruptcy in order to pay the $70 million. However, the federal government previously said the payment would not affect healthcare services.

WIS has reached out to the hospital for comment and is awaiting a response.

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