Chesapeake (Va.) Regional Medical Center has agreed to pay more than $19.2 million in restitution and penalties as part of a finalized agreement with federal prosecutors over medically unnecessary procedures performed by a former OB-GYN.
The hospital and the U.S. Attorney’s Office for the Eastern District of Virginia finalized a deferred prosecution agreement Oct. 23, according to court documents obtained by Becker’s. The agreement stems from criminal charges related to the hospital’s decadeslong relationship with Javaid Perwaiz, a former physician who was convicted of healthcare fraud and other offenses in 2020.
Under the agreement, Chesapeake Regional will pay $6.4 million to healthcare programs — including Medicare, Medicaid and Tricare — and establish a $12.8 million restitution fund for patients who underwent procedures performed by Mr. Perwaiz at the hospital.
Eligible patients will have six months from the start of the agreement’s two-year term to submit claims for compensation. The fund will cover qualifying losses under federal restitution law, including certain medical expenses, but not emotional distress or similar damages, according to court documents. Any remaining funds generally must be paid to the federal government as a fine, subject to the agreement’s terms.
The hospital also acknowledged responsibility for conduct outlined in an accompanying statement of facts, including repeatedly renewing Mr. Perwaiz’s medical privileges despite knowledge of his previous misconduct and concerns raised by hospital employees, according to court documents.
According to the filing, hospital leaders were aware of improper inpatient billing practices, insufficient documentation supporting medical necessity and deficiencies involving patient consent for sterilization procedures. The hospital continued billing certain healthcare programs for procedures performed by Mr. Perwaiz despite those concerns.
A federal grand jury indicted Chesapeake Regional in January 2025 on charges of healthcare fraud and conspiracy to defraud the U.S. government. Mr. Perwaiz, who performed procedures at the hospital from 1984 until his arrest in 2019, is serving a 59-year prison sentence following his conviction on 52 federal charges.
Under the deferred prosecution agreement, the hospital must retain an independent compliance monitor and implement additional safeguards involving physician oversight, patient consent, medical necessity reviews and employee reporting of potential violations. The agreement’s two-year term will begin once the hospital retains both the compliance monitor and a claims administrator.
If Chesapeake Regional complies with the agreement, prosecutors will move to dismiss the criminal charges. The parties have asked the federal court to approve the deferral of prosecution.
“First and foremost, we express our sorrow to the women and families impacted by these events for all that they have endured,” a hospital spokesperson said in a statement to Becker’s. “We also must reflect on and take responsibility for our organization’s role in the past relating to this physician’s practices.”
The spokesperson said the hospital has already strengthened its compliance program, including hiring an external expert, expanding compliance leadership, updating staff training and incorporating medical necessity into its billing audit process.
“Patient safety and quality care remain our highest priorities,” the spokesperson said. “We operate under rigorous quality care oversight, reporting and accountability processes. Our board and new leadership team remain actively engaged in maintaining the high standards our patients expect.”
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