Tacoma, Wash.-based MultiCare Health System has agreed to pay more than $3.7 million to resolve allegations that it fraudulently billed government and commercial insurers for spine surgeries performed by former neurosurgeon Jason Dreyer, DO.
Eight things to know:
1. The Justice Department said in a Feb. 4 news release that the investigation showed how “MultiCare hired, credentialed and supervised Dr. Dreyer,” failed to take action on several red flags and evidence of the surgeon’s fraud, “all while increasing its own revenue with fraudulently obtained tax payer money.”
2. Dr. Dreyer performed spine surgeries at Deaconess Hospital in Spokane, Wash., between 2019 and 2021, according to court records. The allegations were first raised in a whistleblower lawsuit filed in April 2022 by a former patient of Dr. Dreyer’s, Deannette Palmer, MD, under the False Claims Act/
3. Court records show that within months of Dr. Dreyer beginning to operate at MultiCare, two physician assistants assigned to assist him in the operating room raised patient safety concerns directly with system leadership. One physician assistant physically left the operating room during a procedure out of concern for patient harm and immediately reported the incident to management. Another raised similar concerns and ultimately resigned rather than continue working with Dr. Dreyer, citing fears of patient endangerment.
4. Despite these reports and additional red flags cited in court filings, prosecutors allege MultiCare did not curtail or stop Dr. Dreyer’s surgical practice. Instead, the system allegedly allowed him to continue performing a high volume of complex spine surgeries that were later determined to be medically unnecessary.
5. Prosecutors further alleged that MultiCare — a 13-hospital system — tied Dr. Dreyer’s compensation to surgical volume and complexity, incentivizing the performance of unnecessary procedures, while continuing to bill federal healthcare programs for those services.
6. Several months after the internal complaints were raised, the U.S. Attorney’s Office informed MultiCare that it was investigating allegations that Dr. Dreyer had harmed patients, falsified diagnoses and performed medically unnecessary surgeries while employed at Renton, Wash.-based Providence. Prosecutors said they provided documentation supporting those concerns, but Dr. Dreyer was still permitted to operate at MultiCare with minimal restrictions. Dr. Dreyer was ultimately restricted from performing spine surgeries after intervention by the Washington State Department of Health, over MultiCare’s objection, according to the Justice Department.
7. The settlement follows more than six years of federal and state investigations into Dr. Dreyer’s surgical practices. Those investigations previously resulted in a multiyear settlement with Providence in 2022 and a more than $1.1 million individual settlement with Dr. Dreyer in 2023, along with a nine-year exclusion from Medicare. Court records also show that MultiCare signed a proposed settlement agreement in August 2023 but later withdrew from the agreement and litigated the case for two additional years before reaching the resolution announced Feb. 4.
“The alleged violations by MultiCare show a wanton disregard for ethics and the medical principle to do no harm,” Washington Attorney General Nick Brown said. “This settlement is a win for patient safety and protecting public dollars to get people necessary healthcare.”
8. MultiCare said the settlement resolved allegations in the whistleblower complaint and is not an admission of any liability or wrongdoing.
“MultiCare is confident in the quality of care provided to our patients and the clinical decision-making of our providers,” CEO Bill Robertson said in a Feb. 4 statement. “MultiCare vigorously litigated the government’s allegations for nearly two years. The record that developed during that process speaks for itself. We are pleased to have resolved this matter and remain focused on delivering high-quality care to the communities we serve.”
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