Judge again balks at WakeMed fraud settlement

Federal investigators said WakeMed routinely billed Medicare for inpatient stays by people who had undergone cardiac treatments, even if they were discharged the same day as the treatment and never spent a night in the Raleigh hospital.

Physician orders to discharge patients also were frequently overwritten so Medicare could be billed, according to federal court documents.

WakeMed agreed in December to pay $8 million to settle the investigation. Prosecutors charged the hospital system with making material false statements relating to health care matters and with aiding and abetting, but they deferred prosecution of the case for two years.

If WakeMed complies with all provisions set out in the settlement agreement during that time, the charges would be dismissed.

U.S. District Judge Terrence Boyle has twice declined to sign off on the settlement. Last month, he criticized prosecutors for not pursuing a criminal case against WakeMed, and he grilled them again Tuesday about the proposed settlement.

Boyle asked whether WakeMed would reimburse the Medicare patients who may have overpaid because of the incorrect billing. Prosecutors said it would be too complicated to figure out who would be owed what – an answer that didn't impress the judge.

He said he needs more time to consider the case before ruling and might write his own order as to how the case should end.

Dr. Bill Atkinson, WakeMed chief executive, declined to comment after the court hearing.

Prosecutors have said they are confident they would prevail if the case went to trial, but they noted a conviction could bar WakeMed from participating in the Medicare and Medicaid programs. The settlement serves the public interest, they said.

As part of the settlement, WakeMed has hired a firm to conduct independent compliance audits, has revised its billing policies and procedures and has reworked its executive and board structure to place more emphasis on reporting compliance.

Also, federal regulators will monitor WakeMed's practices regarding Medicare for five years as part of a corporate integrity agreement. The agreement spells out the hospital's conduct for submitting claims, training employees and reviewing policies and sets up a method for workers to disclose any future problems with Medicare billing.