Former Tuomey CEO Settles with DOJ for $1 Million

BakerHostetler
Contact

BakerHostetler

The U.S. Department of Justice (DOJ) recently reached a $1 million settlement with Ralph J. Cox III, the former CEO for Tuomey Health System, Inc. (Tuomey), in connection with his involvement in the notable Stark Law case. After protracted litigation, Tuomey agreed to pay $72.4 million in October 2015 to settle allegations that the system had violated the Stark Law. The government alleged that Cox, in hopes of addressing local competition from a new freestanding surgery center, caused Tuomey to enter into illegal compensation agreements with 19 physician specialists. Emphasizing that “the Justice Department and its law enforcement partners will hold individual decision makers accountable for their involvement in causing the companies and facilities they run to engage in unlawful activities,” the Cox settlement is significant given the high level positions Cox held as both CEO and board member.

Under the terms of the settlement agreement, which include a four-year exclusion from participation in federal healthcare programs, Cox will personally pay $1 million to resolve his involvement in the Tuomey case. To that end, the former CEO agreed to release Tuomey from any indemnification claims or reimbursement of the settlement payment amount. In reaching the settlement agreement, it appears the DOJ utilized sworn financial statements provided by Cox to verify his ability to pay the settlement amount. If the DOJ learns that Cox failed to disclose more than $150,000 of assets, it may rescind the settlement agreement or collect the full settlement payment amount plus 100 percent of the value of Cox’s undisclosed net worth.

Signifying that additional settlements with individuals may be forthcoming, Cox has agreed to cooperate fully with the DOJ’s ongoing investigation of other individuals and entities associated with the Tuomey case.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© BakerHostetler | Attorney Advertising

Written by:

BakerHostetler
Contact
more
less

PUBLISH YOUR CONTENT ON JD SUPRA NOW

  • Increased visibility
  • Actionable analytics
  • Ongoing guidance

BakerHostetler on:

Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:
*By using the service, you signify your acceptance of JD Supra's Privacy Policy.
Custom Email Digest
- hide
- hide