WA State & US File False Claims Act Complaint Against Multicare (Incl. Deaconess) For Knowingly Endangering Patients & Fraudulently Billing For Spinal Surgery Procedures (2024)

From the U.S. Attorney’s Office:

SPOKANE, WA – Vanessa R. Waldref, the United States Attorney for the Eastern District of Washington, announced today that the United States and State of Washington filed a Complaint in federal district court against MultiCare Health System, a Tacoma-based hospital and healthcare system that owns and operates MultiCare Deaconess Hospital (Deaconess) and MultiCare Rockwood Clinic in Spokane, alleging that MultiCare knowingly endangered patient safety and falsely and fraudulently billed Medicare, Medicaid, and other federal health care programs for spinal surgery procedures performed at Deaconess between 2019 and 2021 by Jason Dreyer, a former neurosurgeon.

Between 2013 and 2019, Dr. Dreyer practiced at Providence St. Mary’s Medical Center in Walla Walla, Washington, a hospital owned and operated by Providence Health & Services (Providence). In 2019, amidst allegations that he was performing medically-unnecessary surgeries, harming patients, and falsifying diagnoses, Providence permitted Dr. Dreyer to resign.

The Complaint against MultiCare announced today alleges that, following Dr. Dreyer’s resignation from Providence, MultiCare hired him to perform neurosurgery services at Deaconess. The Complaint alleges that during MultiCare’s hiring process, it became aware of concerns and “red flags” about Dr. Dreyer and his surgical judgment from his time at Providence, but, recognizing that he was a “workhorse”, made the decision to hire him and allow him to begin seeing patients and performing surgery at Deaconess Hospital in July 2019. The Complaint further alleges that in October 2019, MultiCare recognized that Dr. Dreyer was performing a high volume of surgeries and generating significant revenue for MultiCare, and so placed Dr. Dreyer on an incentive compensation structure, meaning that the greater volume and complexity of surgeries performed by Dr. Dreyer, the more money he would make.

The Complaint also alleges that in February 2020, the United States Attorney’s Office specifically informed MultiCare that it was investigating concerns that Dr. Dreyer was harming patients, falsifying diagnoses, and performing medically-unnecessary surgeries. According to the Complaint, despite receiving this information, as well as multiple internal complaints and concerns that Dr. Dreyer was performing medically unnecessary surgeries at MultiCare and endangering patients, MultiCare made the decision to allow Dr. Dreyer to continue seeing patients and performing surgery until the Washington Department of Health summarily suspended Dr. Dreyer’s ability to perform surgery in March 2021.

The Complaint alleges that MultiCare not only endangered patients through its conduct, but falsely and fraudulently claimed and received reimbursem*nt for millions of dollars from federal health care programs between July 2019 and March 2021. The federal health care programs are: (1) Medicare, which provides health coverage to elderly and disabled Americans; (2) Washington State Medicaid, which is jointly administered and funded by the United States and the State of Washington, and which provides health coverage to low-income Washingtonians; (3) the U.S. Department of Veterans Affairs (VA) Community Care program, which provides health insurance coverage for veterans for certain specialized services that cannot be performed at VA facilities; (4) the TRICARE program, which provides health insurance coverage for active duty and retired military servicemembers, reserves, and their families; and (5) the Federal Employee Health Benefits program, which provides health insurance coverage to federal civilian employees.

“As alleged in the Complaint, MultiCare was aware of serious concerns that Dr. Dreyer was putting patients in danger,” said United States Attorney Waldref. “The Complaint alleges that MultiCare nonetheless made the decision to allow him to treat and operate on patients, even after it became aware of the federal investigation. This is an egregious breach of the public trust.”

In April 2022, Providence agreed to pay approximately $22.7 Million and implement a standard of care corporate integrity agreement to resolve its liability concerning surgical procedures performed by Dr. Dreyer and another neurosurgeon that Providence billed to federal health care programs. In April 2023, Dr. Dreyer agreed to pay approximately $1.2 Million to resolve his individual liability under the False Claims Act.

“Health care providers that perform medically unnecessary procedures undermine the public’s trust in the health care system and exploit taxpayer-funded programs,” stated Special Agent in Charge Steven J. Ryan of the Department of Health and Human Services Office of Inspector General (HHS-OIG). “Working with our law enforcement partners, HHS-OIG is committed to protecting patients and the integrity of federal health care programs.”

“VA’s Community Care programs provide veterans and their families the ability to obtain critical healthcare services from providers within their own communities,” said Special Agent in Charge Jason Root of the Department of Veterans Affairs Office of Inspector General’s Northwest Field Office. “This enforcement action underscores the VA OIG’s commitment to safeguarding the integrity of VA’s healthcare programs and operations and preserving taxpayer funds.”

“The filed complaint is a constructive step forward in holding MultiCare accountable for putting profit ahead of patient care and safety by willfully ignoring the dubious practices of one of its doctors,” said Bryan D. Denny, Special Agent-in-Charge for the Department of Defense (DoD), Office of Inspector General, Defense Criminal Investigative Service (DCIS), Western Field Office. “DCIS remains committed to working with its partners to identify and eliminate fraudulent schemes that endanger patient safety and corrupt the integrity of the DoD’s health care program.”

“I’m grateful for the close collaboration we have had with our partners at the Washington Attorney General’s Office, the Department of Health and Human Services Office of Inspector General, the Office of Personnel Management Office of Inspector General, the Defense Criminal Investigative Service, and the U.S. Department of Veterans Affairs Office of Inspector General,” continued U.S. Attorney Waldref. “It was that close collaboration and teamwork throughout these investigations that made the Providence and Dr. Dreyer results possible.We will continue working with our law enforcement partners to protect patient safety and to hold accountable those who put profits ahead of patient safety.”

According to court documents, while the United States’ and State of Washington’s investigation of Providence began in February 2020, in April 2022, a former patient of Dr. Dreyer’s at MultiCare filed aqui tamcomplaint under seal in the U.S. District Court for the Eastern District of Washington. When a whistleblower, or “relator,” files aqui tamcomplaint, the False Claims Act requires the United States to investigate the allegations and elect whether to intervene and take over the action or to decline to intervene and allow the relator to go forward with the litigation on behalf of the United States.The relator is generally able to then share in any recovery. Over the past decade, recoveries in the Eastern District of Washington in False Claims Actcases have exceeded $400 million.

The joint investigation was conducted by the U.S. Attorney’s Office for the Eastern District of Washington; the U.S. Department of Health and Human Services, Office of Inspector General, Seattle Field Office; the U.S. Department of Veterans Affairs, Office of Inspector General, Spokane Resident Office; the Office of Personnel Management, Office of Inspector General, Seattle Field Office; the Defense Criminal Investigative Service, Seattle Field Office; and the State of Washington Attorney General’s Medicaid Fraud Control Division. Assistant United States AttorneysDan FruchterandTyler H.L. Tornabeneof the Eastern District of Washington are handling this matter on behalf of the United States.

Case No: 2:22-cv-00068-SAB (E.D. Wash.)