Judge Approves Two-Year Delayed Prosecution of WakeMed

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A Federal district court judge issued a February 8, 2013 order granting a delayed prosecution against Raleigh, NC-based WakeMed Health and Hospitals for allegedly submitting false inpatient bills to Medicare.  The government’s case against WakeMed  alleged that the hospital submitted inpatient claims for cardiac patients that did not actually stay overnight in the hospital.  The court’s order states that in many cases, physician orders specifically directed that patients be treated on an outpatient basis, but hospital billing staff altered those orders to indicate an inpatient admission.  WakeMed’s Zone Program Integrity Contractor (ZPIC) reviewed a sample of these claims and alleged that WakeMed received at least $1.2 million in improper Medicare reimbursement. 

As part of a settlement, WakeMed entered into a five-year corporate integrity agreement (CIA) and paid an $8 million civil False Claims Act penalty.  The government agreed to delay prosecution of the remaining felony fraud charges against WakeMed for fear that a conviction—and exclusion from the Medicare program—would lead to the hospital’s closure.  The district court’s order approves the settlement between the parties to delay prosecution for two years.  The government agreed that it would drop its criminal prosecution at such time if WakeMed remained in full compliance with its CIA and has not “committed further serious federal crimes related to its billing practices.”  The court’s order is available by clicking here.

Reporters, John Richter, Washington, D.C., + 1 202 626 5617, jrichter@kslaw.com and Christopher Kenny, Washington, D.C., + 1 202 626 9253, ckenny@kslaw.com.