DOJ Reaches $22.7 Million Settlement with Providence Over Medically Unnecessary Neurosurgery Procedures
In mid-April 2022, the United States Department of Justice (DOJ) announced a $22,690,458 settlement with Providence Health & Services Washington (Providence) to resolve allegations that it fraudulently billed Medicare, Medicaid, and other federal health care programs for medically unnecessary neurosurgery procedures.
Providence operates 51 hospitals in seven western states, including Providence St. Mary’s Medical Center in Walla Walla, Washington. Providence St. Mary’s previously paid neurosurgeons based on a productivity metric, providing them a financial incentive to perform more complex surgical procedures. According to the settlement, Dr. A was one of the highest producing neurosurgeons in the entire Providence system between 2014 and 2018. Based on the productivity metric, from 2015 to 2017, Dr. A was paid between $2.5 million and $2.9 million annually. The Settlement also resolves allegations against a Dr. B, who also allegedly performed “deficient and medically unnecessary neurosurgery procedures.” Dr. B was employed by Providence between November 2015 and May 2017.
Through the settlement, Providence admitted that during the time Doctors A and B were employed by Providence St. Mary’s as neurosurgeons, Providence medical professionals voiced concerns that the doctors were endangering the safety of patients; created an excessive level of complications and negative outcomes through their surgeries; performed surgery on patients who should not have been candidates for the procedure; and failed to properly document their procedures and outcomes.
Providence also admitted that medical personnel voiced additional concerns about Dr. A, including that Dr. A falsified medical documentation, including false and exaggerated diagnoses to obtain reimbursement from insurance providers; performed surgical procedures that did not meet the medical necessity requirements set by Medicare and other insurance programs; performed surgeries of greater complexity and scope than were medically necessary and appropriate; and jeopardized patient safety by performing an excessive number of complex surgeries.
Finally, Providence admitted that while it did place both doctors on administrative leave in February 2017 (Dr. B) and May 2018 (Dr. A), the hospital allowed the doctors to resign while on leave – Dr. B in May 2017 and Dr. A in November 2018 – and did not take any action to report either doctor to the National Practitioner Data Bank or the Washington State Department of Health.
The qui tam case was initially brought by the former Medical Director of neurosurgery at Providence St. Mary’s in January 2020. The relator will receive $4,197,734 of the total settlement amount.
“Patients with back pain and spinal injury deserve top-notch care from a provider who puts the patient first and is not improperly influenced by how much he can bill for the procedure. Providence’s failure to ensure that Dr. A and Dr. B were performing safe and medically-appropriate surgery procedures, despite repeated warnings, put patients’ lives and safety at serious risk. I am also gravely concerned that Providence’s decision not to report Dr. A or Dr. B to federal or state medical oversight bodies allowed both surgeons to simply resign from Providence and then continue to endanger patients at other hospitals,” said Vanessa R. Waldref, the United States Attorney for the Eastern District of Washington.