Ralph “Jay” Cox III, the former Chief Executive Officer of Tuomey Healthcare Systems (“Tuomey”) in Sumter, South Carolina, recently paid $1 million to settle his involvement in Tuomey’s illegal billing practices under Medicare and Medicaid. 

Back in October 2015, following a federal appellate court’s decision to uphold a $237 million jury verdict against Tuomey for violations of the False Claims Act and the Stark Law, Tuomey agreed to settle with the United States for a reduced amount of $72.4 million. The jury had found that Tuomey billed Medicare and Medicaid for services rendered by physicians with improper ties to the healthcare system.  

Now, nearly a year later, Mr. Cox separately settled claims regarding his role in Tuomey’s practices by personally paying a substantial fine and agreeing to be excluded for four years from participating in federal health care programs, including providing management or administrative services paid for by federal health care programs.  

Mr. Cox’s settlement agreement shows that high-ranking healthcare executives face significant potential personal exposure in False Claims Act and Stark Law suits.  Adequate training and compliance programs are essential to make sure that executives are aware of and understand these laws.  Otherwise, executives can find themselves in Mr. Cox’s position:  paying fines out of their own pockets and being banned from their industry.