- Providence Health & Services Washington has agreed to pay about $22.7 million to settle allegations it fraudulently billed Medicare, Medicaid and other federal healthcare programs for medically unnecessary neurosurgery procedures, the Justice Department said Tuesday.
- In the settlement, the hospital system admitted medical personnel reported concerns that two neurosurgeons employed at Providence St. Mary's Medical Center in Walla Walla, Washington, performed procedures on candidates who were not appropriate for surgery, endangered patients' safety and caused excessive levels of complications and negative outcomes.
- Providence has entered into a corporate integrity agreement with the HHS Office of Inspector General that requires the provider to retain outside experts to perform annual claims and clinical quality systems reviews. Providence must implement several patient quality-of-care and safety procedures as part of the settlement.
Providence St. Mary's from 2013 to 2018 paid its neurosurgeons based on a productivity system that gave them a financial incentive to perform more surgical procedures of greater complexity, according to the DOJ. One of the two neurosurgeons in the case was paid $2.5 million to $2.9 million a year between 2014 and 2017, based on the productivity metric.
The doctor was one of the highest-producing neurosurgeons in the Providence system during this time period. Providence operates 52 hospitals in the western U.S.
As part of its agreement with the government, Providence admitted that the neurosurgeon, identified as Dr. A, was the subject of additional concerns reported by hospital personnel. Those included exaggerating diagnoses in medical documentation to obtain reimbursement from insurers and performing surgical procedures that did not meet the medical necessity requirements set by Medicare and other insurance programs.
Further, Dr. A performed surgeries of greater complexity and scope than were medically appropriate and jeopardized patient safety by attempting to perform an excessive number of overly complex surgeries, the DOJ said.
"Patients trust their doctors that the care they receive is necessary, particularly when they are undergoing neurosurgery," said Washington Attorney General Bob Ferguson. "Performing unnecessary surgeries for profit is a betrayal of that trust."
Providence also admitted that it placed the two neurosurgeons on administrative leave but allowed both to resign while on leave, and did not report either doctor to the National Practitioner Data Bank or the Washington State Department of Health.
Providence ultimately accepted responsibility, took "appropriate and meaningful corrective action," cooperated fully in the government's investigation and agreed to cooperate in ongoing investigations, said Vanessa Waldref, U.S. attorney for the Eastern District of Washington.
The case began in January 2020 when a whistleblower, the former medical director of neurosurgery at Providence St Mary's, filed a complaint in the U.S. District Court for the Eastern District of Washington. The federal government intervened in the action in January 2022.
The agreement reached between Providence, the United States and the state of Washington is the largest-ever healthcare fraud settlement in the Eastern District of Washington.