5-year integrity agreement for WakeMed

WakeMed Health and Hospitals' 647-bed campus in Raleigh, N.C., has come under a five-year corporate integrity agreement with the HHS, even though the hospital is still waiting for word from a federal judge on whether it can settle a felony charge of Medicare outpatient upcoding.

WakeMed Health and Hospitals was charged Dec. 19 with allowing its personnel to ignore and in some cases fabricate physician orders for patients in the Raleigh campus' cardiac department so that the hospital could charge Medicare for costly hospital treatment, even though the heart unit has no acute-care beds.

Civil cases involving upcoding are relatively common for hospitals, but numerous healthcare attorneys said they believed it was the first instance of a hospital being criminally charged for making material false statements to overbill Medicare.

Executives at WakeMed attempted to admit wrong-doing as part of a deferred prosecution agreement that would erase the criminal charge after two years of compliance. However, a federal judge on Jan. 17 rejected the proposed agreement as “a slap on the hand.”

At a second hearing on Feb. 5, U.S. District Judge Terrence Boyle listened as prosecutors presented the same agreement again, but with more explanation (PDF). WakeMed President and CEO Dr. Bill Atkinson and Board Chairman Tom Oxholm both attended the Feb. 5 hearing, though they were not asked to answer any questions. Boyle's decision on the matter could come any day.

Separately, hospital officials have already signed a civil settlement in the case that requires WakeMed to pay $8 million to Medicare—which represents $1.2 million in actual overpayments between 2003 and 2010, plus $6.8 million in damages and fines. The civil settlement was signed along with a related corporate integrity agreement, and does not need the judge's approval.

The corporate integrity agreement stipulates (PDF) extensive employee training on how to manage cases and submit accurate bills. It also requires WakeMed to give each of its board members training on “the responsibilities of board members and corporate governance,” and a related requirement that a board compliance committee annually certifies the effectiveness of the hospital's compliance program.