It was not how defense attorneys for WakeMed and the U.S. Attorney’s Office for the Eastern District of North Carolina expected January to begin. A tidy plea deal between WakeMed, the esteemed health care operation that serves much of Eastern North Carolina, and the U.S. Attorney’s Office was all set, and Judge Terrence Boyle was presiding.
The deal related to Medicare overcharges that prosecutors said came about when WakeMed billed Medicare for overnight stays by patients who were in fact not staying overnight. A multi-year investigation has taken place after an audit turned up problems. The hospital seemed to blame the problem on technicalities. Prosecutors demanded more, and so WakeMed agreed to pay $8 million in exchange for a deferred prosecution, meaning a charge would be dismissed if the organization straightened up.
Such deals, with large sums, are not uncommon in federal courts. Offending corporations have to separate from lots of money, which they don’t like to do. Judges do not have to put them out of business, which they do not like to do.
In this case, Boyle noted that if WakeMed faces a criminal felony conviction, it might lose eligibility for Medicare and Medicaid and would thus be out of business.
But he declined to accept the deal initially and even delayed action after a second meeting with the hospital system’s attorneys and prosecutors. This was most unusual, as judges usually treat these matters as routine.
Boyle did the right thing in calling attention to the case and questioning both sides sharply. In the second hearing, he was particularly concerned that patients be properly reimbursed for any improper charges they may incurred.
Boyle ultimately signed off on the deal. But his delay ought to serve as an example to other judges considering these deferred prosecution arrangements with federal prosecutors. They should not be treated as ho-hum and routine. Money’s involved. Right and wrong are involved. Justice is involved.
We hope Boyle’s impatience with settlements is part of a trend. On Thursday, there was a sign of it. During testimony at a Senate Banking Committee hearing, U.S. Sen. Elizabeth Warren criticized federal regulators for settling civil cases instead of taking them to trial. Warren, a Massachusetts Democrat and an advocate for consumers, was referring to Wall Street banks, but her conclusion applies to all such deals.
“Every time there is a settlement and not a trial, it means we didn’t have the days and days and days of testimony about what those financial institutions were up to,” Warren said.