A federal judge has taken the unusual step of rejecting a deferred prosecution agreement between the U.S. government and WakeMed, a hospital chain accused of defrauding Medicare by charging for overnight care never provided. The agreement, which came after two years of negotiation, would have resolved allegations that WakeMed’s heart center routinely misclassified patient care, billing Medicare for expensive overnight stays when patients had actually been treated and released on the same day. WakeMed was prepared to pay $8 million to settle the case.

Judge Terrence Boyle of the Eastern District of North Carolina, however, refused to ratify the agreement, expressing displeasure that the government had not brought criminal indictments against WakeMed. Judge Boyle also emphasized the real-world cost of Medicare fraud: “Who are the victims in this case? Every American wage earner and every American citizen.”

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