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Wiley Rein’s Kirk Nahra Comments on Deferred Prosecution Agreement in Hospital Investigation

Bloomberg BNA’s Health Law Reporter
February 14, 2013

Kirk J. Nahra, co-chair of Wiley Rein’s Health Care Practice, was quoted in an article about a deferred prosecution agreement in a case involving a health system that was under criminal investigation. WakeMed, a North Carolina-based health system was under investigation for falsely billing federal programs for in-patient care. The U.S. District Court for the Eastern District of North Carolina granted the government’s request to defer prosecution of WakeMed, noting the need to balance the “seriousness of defendant’s offense against the potential harm to innocent parties that could result should this prosecution go forward.” The agreement will require the system to pay $8 million and comply with the terms of a five-year corporate integrity agreement (CIA) to avoid further penalties. Deferring prosecution will also let WakeMed avoid being excluded from federal health care programs.

Mr. Nahra said that the decision to defer prosecution “reflects a focused evaluation by the government agencies of whether to exercise the full scope of their exclusion authority.” He added that “this serves as a reminder that the agencies have discretion in this area and that they have a continuing reluctance to go to the full extreme of imposing the exclusion remedy.”

Mr. Nahra said that it is too soon to predict how any criminal liability against individuals with WakeMed would play out. “The agreements call for the system to cooperate with any ongoing investigations and do not rule out the possibility of individual prosecutions,” he said. “However, the government in the past has had some big cases against corporate entities but lost in their cases against individuals,” he noted.

Pointing to the CIA that WakeMed agreed to, Mr. Nahra added that “CIAs, while nothing new, are a big deal because they are always burdensome and always expensive.”