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WakeMed to pay $8M to end Medicare fraud investigation

Posted December 19, 2012

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— WakeMed has agreed to pay $8 million to the federal government to settle an investigation into fraudulent Medicare billing practices, the U.S. Attorney's Office said Wednesday.

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.

Some WakeMed managers were aware of the billing practices, officials said, but the investigation hasn't revealed that anybody personally benefited from the scheme.

"This case will serve as a reminder that hospitals, just like individual health care providers, will be held accountable for their actions," U.S. Attorney Thomas Walker said in a statement. "Medicare is a program that relies upon its providers to only bill for services that are actually provided. Unfortunately, that system of trust carries with it the inherent potential for abuse."

The investigation started in 2007, when an auditor hired by federal regulators to root out Medicare fraud determined that WakeMed had the seventh-highest rate nationally of "zero-day stay" billings, or bills to Medicare for inpatient hospital stays lasting less than a day, officials said.

When the auditor was unable to reconcile the statistics with information gathered from interviews with WakeMed managers and a review of hospital policies regarding patient admissions, the U.S. Attorney's Office and the U.S. Department of Health and Humans Services stepped in. Investigators subpoenaed WakeMed records and interviewed numerous employees to build a case against the hospital.

WakeMed CEO Dr. Bill Atkinson WakeMed CEO says hospital wasn't trying to cheat government

Dr. Bill Atkinson, WakeMed president and chief executive, said there was never any intent to defraud the government, and no hospital employee was disciplined.

"We do not think it was intentional, and that is why nobody was prosecuted for it," Atkinson said, blaming the problem on complex Medicare regulations.

"The rules change – and they change frequently – but at the end of the day, we are responsible for how that works," he said. "You ask your clinical personnel to interpret this, and I think they give it their very best shot at doing the right things by patients. They do not always get the categories correct."

Fewer than 150 cases included questionable billing, he said.

Federal authorities charged WakeMed with making material false statements relating to health care matters
and with aiding and abetting, but the settlement will defer prosecution of the case. If the hospital complies with provisions set out in the settlement agreement for the next two years, the charges will be dismissed.

WakeMed has already paid more than $1.2 million to the Medicare program for some of the questionable claims and must pay the remaining $6.7 million to the government by next week.

Federal authorities noted in the settlement that the hospital also has already 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.

"These are good people. It is understandable for us, how it happened," Atkinson said. "It doesn’t make it OK, and the education work we are doing hopefully will make sure this does not happen.”

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.

84 Comments

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  • superman Dec 21, 4:12 p.m.

    What is the difference being in a hospital bed during the day and being in the hospital at night. You are receiving treatment. So there should be no charge for the bed during the day but it is ok to charge at night. I dont work for a motel or a hospital but I think charging for the bed is reasonable.

  • superman Dec 21, 9:07 a.m.

    If you are in a bed you need to pay. Most motels have gotten away from renting rooms by the hour. Do you have any idea as to the hundreds of people who go to the hospital and cant pay anything? They have to charge enough from the rich in order to care for the poor.

  • kurtsdollarbill Dec 20, 1:50 p.m.

    Bill I guess no one will be punished or fired at Wake Med because you knew what was taken place you crook!! I hope other insurance groups follow and uncover shady billing practices in this hospital. The punishment should be pd by Mr Bill and his high bonus needs to come to a end.

  • lumberman Dec 20, 1:37 p.m.

    Wake Med must be alot like UBS to big to jail. Just get your money back plus some and everything will be ok. But I bet if that was me who stole that kind of money I would be going to jail.

  • weasel2 Dec 20, 12:27 p.m.

    Must be nice to just pay your way out of going to jail.

  • tran Dec 20, 12:17 p.m.

    The moral of the story is if you're going to steal, steal big.

  • Wake1 Dec 20, 11:25 a.m.

    Wonder if other large hospitals are doing the same thing? After all, if it's due to complex Medicare rules, then either the billing folks at other hospitals are smarter or they are doing it too? What say ye Bill??

  • TomInWakeForest Dec 20, 11:03 a.m.

    Another example of no accountability. Isn't it amazing how clearly people see the need to educate differently and administer differently AFTER they are caught doing wrong?! Where was all this clear thinking while the wrongs were being done? Accountability has to live somewhere ... seems pretty hard to find at Wake Med.

  • norskagent Dec 20, 10:35 a.m.

    How else did you expect WakeMed to pay for all those "heart care" and "cancer care" radio and TV ads they are constantly pumping out?

  • are you kidding me Dec 20, 9:33 a.m.

    I am sure it is not a fun house in Accouting...but on the floor you have "slow walkingit."...nurses and cna's for the most part are moving...just do not be in the way when cafetaria opens...plenty of ways to lower costs and cutting ceo wages

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