MultiCare Health System, a hospital and healthcare provider based in Tacoma, Washington, has agreed to pay $3.7 million to settle allegations that it endangered patient safety and submitted fraudulent bills to federal health care programs for unnecessary spinal surgeries. The settlement resolves claims related to procedures performed at MultiCare Deaconess Hospital in Spokane between 2019 and 2021 by Dr. Jason Dreyer, a former neurosurgeon at the facility.
The United States Attorney’s Office for the Eastern District of Washington announced the agreement following two years of litigation and a broader six-year investigation into practices at MultiCare and other institutions. Previous settlements were reached with Providence Health & Services, Dr. Dreyer’s prior employer, which paid $22.7 million in 2022, as well as with Dr. Dreyer himself, who paid over $1.1 million in 2023 and was excluded from Medicare for nine years (https://www.justice.gov/usao-edwa/pr/providence-health-services-agrees-pay-227-million-resolve-liability-medically;https://www.justice.gov/usao-edwa/pr/former-physician-pay-more-11-million-resolve-allegations-he-performed-medically).
MultiCare admitted to facts regarding its conduct as part of the settlement, including paying $1.6 million in restitution due to violations of federal and state law documented in court records. Investigators found that MultiCare hired and supervised Dr. Dreyer despite multiple warnings about his conduct from medical staff and evidence of fraudulent activity.
Court documents show that two physician assistants assigned to work with Dr. Dreyer raised concerns about patient safety directly to management within months of his arrival at MultiCare. One assistant left the operating room during surgery out of fear for patient harm and reported this immediately; another resigned rather than continue working with Dr. Dreyer due to similar concerns. Despite these reports, MultiCare did not restrict Dr. Dreyer’s ability to perform surgeries or address red flags raised by staff.
Instead, according to court records, MultiCare allowed Dr. Dreyer to perform a high volume of complex spinal surgeries deemed medically unnecessary while tying his compensation directly to the number and complexity of procedures he conducted—thereby incentivizing further operations—and continued billing federal health care programs for these services.
Several months after internal complaints surfaced, federal investigators informed MultiCare they were investigating allegations against Dr. Dreyer related to harm caused during his previous employment at Providence Health & Services (https://www.justice.gov/usao-edwa/pr/united-states-and-state-washington-file-false-claims-act-complaint-against-multicare). Despite receiving supporting documentation from authorities, MultiCare permitted Dr. Dreyer to continue performing surgeries until state regulators intervened.
“As the voluminous court records of this case demonstrate, MultiCare had direct knowledge of the danger Dr. Dreyer posed to patients, including through reports made by its own medical staff, and later from explicit warnings from federal investigators,” said Pete Serrano, First Assistant U.S. Attorney for the Eastern District of Washington. “MultiCare nonetheless allowed Dr. Dreyer to operate on unsuspecting patients for nearly two years, generating thousands in additional revenue and putting profits before patient safety. Today, thanks to years of comprehensive investigation and litigation, MultiCare has been held accountable for its role in defrauding the taxpayers and endangering some of the most vulnerable members of our community.”
Court records indicate that MultiCare initially agreed to settle these allegations in August 2023 but withdrew from that agreement before ultimately resolving the matter through litigation.
“Today’s settlement shows that no matter who you are, from an individual to a large corporation, if you commit fraud and choose to litigate with the United States rather than accept responsibility, you will be held accountable for your violations and you will pay more in the end,” Serrano added.
Washington Attorney General Nick Brown commented: “The alleged violations by MultiCare show a wanton disregard for ethics and the medical principle to do no harm,” adding: “This settlement is a win for patient safety and protecting public dollars to get people necessary healthcare.”
Special Agent in Charge Robb R. Breeden of HHS-OIG stated: “Patients trust that the care that they receive from their health providers is medically necessary and in their best interest... When providers perform medically unnecessary surgeries and bill federal health care programs including Medicare and Medicaid for them, they not only violate that trust but also exploit programs designed to protect vulnerable populations.”
Other agencies involved included the Department of Defense Office of Inspector General; U.S. Office of Personnel Management Office of Inspector General; Department of Veterans Affairs Office of Inspector General; as well as Washington State's Medicaid Fraud Control Division.
“This is the culmination of a multi-year, multi-agency collaborative effort,” said Serrano.
The case began when former patient Dr. Deannette Palmer filed a qui tam complaint under seal in April 2022 in U.S District Court for Eastern Washington—a type of whistleblower lawsuit under which she will receive 17% ($633,760) of today’s settlement amount as well as attorney fees.
