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February 09, 2013 12:00 AM

Late News: WakeMed deal OK'd

Judge says impact of closing hospital too drastic

Joe Carlson
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    A federal judge allowed North Carolina's WakeMed Health and Hospitals to take an unusual deal to avoid a criminal trial because the risk of closing down a Raleigh, N.C., hospital is too perilous for patients and workers.

    The not-for-profit corporation was charged in December with one count of making materially false statements in order to increase Medicare reimbursements—an unprecedented criminal charge for a community hospital, according to prosecutors and numerous legal experts.

    Hospital officials admitted in court records that staff members in the Wake Heart Center on the system's Raleigh campus routinely ignored and fabricated physician orders, and as a result billed Medicare for inpatient care when cardiac patients didn't stay overnight in the hospital.

    The issue first came to light after a review by a Zone Program Integrity Contractor, Cahaba Safeguard Administrators, found that WakeMed had the highest percentage of so-called “zero-day stays” in the state, and one of the highest such rates in the nation, between 2003 and 2006. Subsequent investigations by hospital staff and prosecutors found widespread irregularities.

    Hospital executives signed an $8 million civil settlement that included False Claims Act penalties and a five-year corporate integrity agreement.

    Prosecutors also charged the hospital with a felony, which would result in WakeMed losing its ability to get Medicare payments if found guilty, but then agreed to allow the system to enter a deferred-prosecution agreement in which the charge would be dropped if the system doesn't reoffend within two years. Prosecutors said in court filings that cutting off the system's ability to be paid for treating Medicare patients “would likely result in WakeMed's demise.”

    U.S. District Judge Terrence Boyle initially refused to accept the agreement, however, saying it was a “slap on the hand” for an organization he called “too big to fail,” according to news accounts from the hearing.

    The decision forced hospital officials and prosecutors to submit detailed briefs and attend a second hearing Feb. 5 to explain why the agreement was appropriate. On Feb. 8, Boyle accepted the terms.

    “The court has considered the threat that the provision of essential healthcare to WakeMed's patients would be interrupted and that the needs of the underprivileged in the surrounding area would be drastically and inhumanely curtailed should defendant be forced to close its doors as a result of the instant prosecution,” Boyle wrote.

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    • News
      • Current News
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      • Transformation
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        • Operations
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      • ESG
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      • Regional News
        • Midwest
        • Northeast
        • South
        • West
      • Digital Edition (Web Version)
    • Opinion
      • Bold Moves
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      • Vital Signs Blog
      • From the Editor
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      • Awards
        • Nominate/Eligibility
        • 100 Most Influential People
        • 50 Most Influential Clinical Executives
        • Best Places to Work in Healthcare
        • Excellence in Governance
        • Health Care Hall of Fame
        • Healthcare Marketing Impact Awards
        • Top 25 Emerging Leaders
        • Top Innovators
        • Diversity in Healthcare
          • - Luminaries
          • - Top 25 Diversity Leaders
          • - Leaders to Watch
        • Women in Healthcare
          • - Luminaries
          • - Top 25 Women Leaders
          • - Women to Watch
      • Conferences
        • Digital Health Transformation Summit
        • ESG: The Implementation Imperative Summit
        • Leadership Symposium
        • Social Determinants of Health Symposium
        • Women Leaders in Healthcare Conference
      • Galas
        • Best Places to Work Awards Gala
        • Health Care Hall of Fame Gala
        • Top 25 Diversity Leaders Gala
        • Top 25 Women Leaders Gala
      • Virtual Briefings
        • - Hospital of the Future
        • - Value Based Care
        • - Hospital at Home
        • - Workplace of the Future
        • - Digital Health
        • - Future of Staffing
        • - Hospital of the Future (Fall)
      • Webinars
    • Multimedia
      • Podcast - Beyond the Byline
      • Sponsored Podcast - Healthcare Insider
      • Video Series - The Check Up
      • Sponsored Video Series - One on One
    • Data Center
      • Data Center Home
      • Hospital Financials
      • Staffing & Compensation
      • Quality & Safety
      • Mergers & Acquisitions
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