In addition to the jury's judgment, the verdict exposes Tuomey to more than $350 million in fines stemming from nearly 22,000 violations of the False Claims Act, which allows the government to claim treble damages. It is not clear, however, whether prosecutors will attempt to collect those fines.
Bassett says law firms and consultants have been warning hospitals for years that anti-kickback statutes in Stark Law represent a significant regulatory risk.
"We have been telling our clients that they need to be very careful about establishing fair market value, about establishing the market need for the relationships with physicians," Bassett says. "They need to have what the government calls an 'arrangements database' where they are monitoring their compliance continually."
As was the case with Tuomey, Bassett says federal prosecutors rely on whistleblowers to ferret out Stark violations.
"It's not like billing. The government is aware of what is being billed to Medicare and Medicaid but the government is not privy to the contracts between hospitals and physicians," he says.
"Typically when there is a problem the government finds out about it through a whistleblower. That is what happened in this case. A physician brought a qui tam action back in 2005. So, this should be a wakeup call that what they have been told by law firms and consultants and the Office of Inspector General is true. This is a high priority."