DOJ settles multi-million dollar lawsuit with Providence over unnecessary neurosurgery procedures

April 12, 2022 10:20 AM

Erin Robinson, Elenee Dao,

Posted: April 12, 2022 10:20 AM

Updated: April 12, 2022 7:55 PM

by Erin Robinson, Elenee Dao

WALLA WALLA, Wash. — The United States Department of Justice has settled a multi-million dollar lawsuit with Providence Health and Services Washington over unnecessary neurosurgery procedures performed at St. Mary’s in Walla Walla.

Providence will pay $22.7 million to resolve allegations that it fraudulently billed Medicare, Medicaid and other federal health care programs for medically unnecessary procedures.

The joint settlement between Providence, the United States and the State of Washington is the largest-ever health care fraud settlement in the Eastern District of Washington.

The DOJ says Providence St. Mary’s paid neurosurgeons based on a productivity metric that gave them a financial incentive to perform more, complex surgeries.

Two doctors, who worked at the hospital for five years, are cited in the settlement. One of them was the highest producing neurosurgeon in Providence’s entire system for four years. As a result, Providence paid that doctor between $2.5 million and $2.9 million per year.

Tuesday’s settlement resolves allegations that Providence falsely billed state and federal health care programs for “deficient and medically unnecessary” procedures performed by the two doctors.

“Ensuring that surgical procedures are medically appropriate and properly performed is critical to building safe and strong communities here in the Eastern District of Washington,” said U.S. Attorney Vanessa Waldref. “Patients with back pain and spinal injury deserve top-notch care from a provider who puts the patient first and is not improperly influenced by how much he can bill for the procedure. Providence’s failure to ensure that Dr. A and Dr. B were performing safe and medically-appropriate surgery procedures, despite repeated warnings, put patients’ lives and safety at serious risk. I am also gravely concerned that Providence’s decision not to report Dr. A or Dr. B to federal or state medical oversight bodies allowed both surgeons to simply resign from Providence and then continue to endanger patients at other hospitals.”

As part of the settlement, Providence admitted that while it eventually placed the two doctors on administrative leave, it allowed both of them to resign while on leave and did not take any action to report them to the National Practitioner Data Bank or the Washington State Department of Health.

“That meant that these physicians were able to go on operating elsewhere,” Waldref said.

Attorney William Gilbert said that’s what happened to his client, Deanette Palmer. Gilbert filed a lawsuit on behalf of Palmer against MultiCare and Jason Dreyer, who he identified as one of the doctors in question in the Providence and DOJ settlement.

Palmer said she had cervical spinal surgery in September of 2020 that changed her life.

“It was a surgery that was supposed to provide pain relief, increased range of motion for me, increased quality of life. I was supposed to spend a couple of days in the hospital and be on the road to recovery. I ended up spending two-and-a-half weeks in the hospital, went home with a feeding tube for six months, still unable to swallow many things,” Palmer said. “I’m in constant chronic pain.”

Dreyer worked for MultiCare following his time at Providence St. Mary. MultiCare says it terminated Dreyer in 2021 after learning his license was restricted “due to alleged transgressions at the provider’s previous place of employment. ”

MultiCare released the following statement regarding Dreyer:

“MultiCare immediately placed the provider on administrative leave. The provider resigned from their position on November 18 while still on administrative leave.

MultiCare requires all physicians, whether they are employed by MultiCare or not, to be in good standing with the Washington State and federal healthcare authorities to practice medicine at our facilities.”

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As for the two doctors in question, including Dreyer, the Department of Justice said one had his license suspended, which Department of Health records show that’s Dreyer, and then the other neurosurgeon is working in a different state. The DOJ said it has contacted the district in which that doctor works in to let them know what happened in Walla Walla.

Because of the settlement, Providence has now entered into a Corporate Integrity Agreement with the U.S. Department of Health and Human Services’ Office of the Inspector General. The CIA requires that the hospital system implements and maintains a number of quality-of-care and patient safety obligations.

Providence released the following statement regarding the settlement:

“Quality and safety are our top priorities at Providence, and we take any allegations relating to quality of care very seriously. Although the events in question occurred at one Providence hospital in the southeast region of Washington state, we initiated a broad and comprehensive internal review of our policies, practices and procedures to ensure robust compliance with government requirements and the delivery of high-quality care.

This unfortunate episode has reinforced our commitment to continuous quality improvement and highlighted the importance of our mission.

We are committed to taking specific, concrete actions to ensure this isolated incident in Walla Walla does not happen again. Providence has strong existing protocols and safeguards to ensure we deliver quality care and make continuous improvements that further enhance those protocols and safeguards. We have already taken swift action to implement the terms of the corporate integrity agreement that we have reached with the U.S. Department of Health’s Office of the Inspector General.”