A major new decision from the U.S. Court of Appeals for the Fourth Circuit has important implications for the availability of the “reliance of counsel” defense, particularly in situations involving the application of complex statutes and regulations.
In U.S. ex rel. Drakeford v. Tuomey, the Fourth Circuit affirmed the District Court’s prior judgment of over $237 million in damages and penalties against a South Carolina nonprofit, tax-exempt health care system. The judgment was based upon a jury finding that the Tuomey Healthcare System had submitted over 21,000 false claims to Medicare pursuant to part-time physician employment contracts, which the jury determined had been submitted in violation of both the federal False Claims Act (FCA) and the federal Stark anti-self referral law.
