Judge refuses to accept deal in cardiac billing case
Federal District Judge Terrance Boyle refused to accept a deferred prosecution agreement between the U.S. Attorney for the Eastern District of North Carolina and WakeMed Health and Hospitals of Raleigh, N.C., on Jan. 17 that would allow WakeMed to settle criminal allegations of falsely billing Medicare for cardiac procedures. The agreement, if accepted, will require WakeMed to pay an $8 million penalty and adhere to various provisions for oversight, in return for which the government will agree to a conditional release of criminal liability.
Boyle postponed a decision pending another hearing scheduled for Feb. 5. “The judge has some process questions and we will be back in court on Feb. 5 to answer them,” WakeMed spokesperson Deb Laughery told Cardiovascular Business.
The deferred prosecution agreement contained a criminal information (a statement spelling out allegations of criminal behavior), a statement of facts, a settlement agreement and a corporate integrity agreement.
The criminal information alleged that between 2000 and 2008, WakeMed billed outpatient cardiac procedures as zero day or one day inpatient admissions in order to secure higher inpatient reimbursement from Medicare, mostly in WakeMed’s Heart Center Observation Area in Raleigh. When a local cardiology practice scheduled a patient for a routine procedure at a WakeMed facility, a patient access nurse would review the demographic information the practice provided, and if the patient had Medicare coverage, create an EHR that designated the patient as an inpatient even if the referring practice had designated the patient as an outpatient. The information described other systematic processes to override physician determinations of a patient’s outpatient status if the patient had Medicare coverage. The parties acknowledged that “[Medicare p]atients were routinely admitted to the hospital without, or in contravention of, physician orders.”
The statement of facts also set forth numerous remedial measures which WakeMed has implemented, including refunding more than $1.2 million to Medicare, hiring an independent compliance auditor, changing the chain of command so that the chief compliance officer reports directly to the CEO, holding all one day and zero day admission claims for pre-billing review and other initiatives.
The settlement agreement will require WakeMed to pay a total of $8 million to settle the claim, but the approximately $1.2 million WakeMed refunded is credited against that amount, so the total additional payment WakeMed agreed to make is less than $7 million. In addition to agreeing not to mount a criminal prosecution, the U.S. Attorney agreed that the Office of Inspector General and the Department of Health and Human Services will not seek to exclude WakeMed from the Medicare or Medicaid programs for violations encompassed in the settlement agreement.
The five-year corporate integrity agreement included standards of behavior and reporting requirements for WakeMed’s compliance officers, compliance committee and board of directors, established codes of conduct and training requirements for billing and documentation staff and other measures designed to ensure compliant practices going forward.
Boyle reportedly questioned why the prosecutors had not filed criminal charges, accepted a guilty plea and deferred sentencing rather than deferring prosecution entirely. Reports also indicated that the judge was concerned about the agreement’s provision protecting WakeMed’s status in the Medicare program, and the fact that no representatives of WakeMed were in court to answer his questions. Laughery said that WakeMed planned to have representation in the courtroom Feb. 5.