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No Deal Yet For WakeMed On Medicare Fraud Charges

U.S. District Judge Terrence Boyle declined to approve a proposed deferred prosecution agreement between federal prosecutors and WakeMed administration related to criminal charges of overbilling Medicare for services not actually rendered. No individuals were charged in the federal criminal investigation; only the corporation was facing felony prosecution.

According to federal prosecutors for the Eastern District of North Carolina, WakeMed had made false claims for Medicare reimbursement for overnight stays in its Heart Center Observation Area. The problem was that the patients, billed as inpatients, were actually outpatients. They were being discharged the same day as their procedure.

Among the many issues Judge Boyle brought up in addressing whether the proposed agreement was appropriate, given the circumstances was the lack of a felony indictment in the case and the perceived leniency given to a very serious criminal charge.

It didn't appear, from the court records, that prosecutors had sought a federal indictment from a grand jury before proceeding with an agreement with WakeMed.

According to Judge Boyle, deferred prosecution is North Carolina is typically granted to teens who've made a mistake and gotten caught with marijuana. Not large corporations who have committed financial crimes against the American taxpayers.

Boyle suggested that a conviction with deferred sentencing might be more appropriate, given the crimes involved. He was unwilling to accept the notion that WakeMed was 'too big to fail' in terms of local hospitals. According to the prosecution, a felony conviction for Medicare fraud would make the hospital ineligible for federal reimbursement under Medicare and Medicaid, essentially shuttering the facility.

Source: Raleigh News Observer, "Judge refuses to accept WakeMed settlement with federal prosecutors," January 17, 2012

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