Washington system fraudulently billed for 'medically unnecessary' spine surgeries, whistleblower suit alleges

The U.S and State of Washington filed a whistleblower suit against Tacoma, Wash.-based MultiCare Health for allegedly fraudulently billing federal healthcare programs for spine surgeries performed by Jason Dreyer, DO, at Deaconess Hospital in Spokane between 2019 and 2021.

From 2013 to 2019, Dr. Dreyer practiced at Providence St. Mary's Medical Center in Walla Walla, Wash. In 2019, amid allegations that the neurosurgeon was performing medically unnecessary surgeries, harming patients and falsifying diagnoses, Providence permitted the neurosurgeon to resign, according to the Justice Department. 

Prosecutors allege that MultiCare was made aware of certain "red flags" about Dr. Dreyer from his time at Providence during the hiring process, but recognized him as a "workhorse," and proceeded to hire him to begin seeing patients and performing surgery at Deaconess in July 2019, according to a complaint filed Jan. 26.

In October 2019, MultiCare allegedly tied Dr. Dreyer to an incentive compensation structure that generated more income for the surgeon depending on the volume and complexity of surgeries he performed. 

The complaint also alleges that MultiCare allowed Dr. Dreyer to perform surgery despite multiple internal complaints and the U.S. Attorney's Office informing the system that it was investigating the surgeon for potentially harming patients, falsifying diagnoses and performing medically unnecessary procedures. Dr. Dreyer continued seeing patients and performing surgery until the Washington Department of Health summarily suspended his ability to perform surgery in March 2021. 

MultiCare endangered patients through its conduct, but falsely and fraudulently claimed and received reimbursement for millions of dollars from Medicare, Medicaid and TriCare, among other government healthcare programs, between July 2019 and March 2021, the Justice Department alleges.

A former patient of Dr. Dreyer's at MultiCare filed a qui tam complaint under seal in the U.S. District Court for the Eastern District of Washington. 

In April 2022, Renton, Wash.-based Providence paid $22.7 million to resolve its liability concerning surgeries performed by Dr. Dreyer and another neurosurgeon that the health system billed to federal healthcare programs. In April 2023, Dr. Dreyer agreed to pay about $1.2 million to settle his individual liability under the False Claims Act.  

"We are aware of the Department of Justice's allegations, and we believe them to be unfounded and without merit," a spokesperson for MultiCare told Becker's in a statement. "We plan to vigorously defend MultiCare in this matter."

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