MultiCare Health System has agreed to a multimillion-dollar settlement with law enforcement to resolve allegations it ignored “numerous red flags” and knowingly permitted and billed procedures conducted by a neurosurgeon under investigation for fraudulent, medically unnecessary care.
The Department of Justice (DOJ) said MultiCare had allowed former physician Jason Dreyer to perform spinal surgery procedures at its facilities between 2019 and 2021. It allegedly did so despite internal warnings from two employees and a notice from investigators that the neurosurgeon was under investigation by the state department of health, for practicing below medical standards of care, and by the federal government for fraudulent billing supported by falsified diagnoses.
MultiCare’s more than $3.7 million settlement with federal and Washington state follows six years of investigations and litigation filed against the nonprofit system in early 2024, the DOJ said in a release announcing the agreement. Those efforts had also yielded a $1.2 million settlement with Dreyer, in 2023, and a $22.7 million settlement with his former employer, Providence, in 2022.
“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,” Pete Serrano, first assistant U.S. attorney for the Eastern District of Washington, said in a release. “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.”
Law enforcement’s announcement said MultiCare agreed to the payment “due to the egregious nature of MultiCare’s violations of federal and state law as shown by its own admissions and detailed court records.”
However, MultiCare said in a statement that it “firmly disagrees with the government’s conclusions and its characterization of the facts in the government’s press release.”
The 13-hospital nonprofit system said it “consistently and directly challenged” the government’s allegations regarding its hiring, credentialing and oversight processes in court, and that the settlement does not involve any admission of liability or determination of wrongdoing. Rather, the system said it agreed to a settlement to “avoid the cost, distraction and uncertainty of continued litigation.”
“MultiCare is confident in the quality of care provided to our patients and the clinical decision-making of our providers,” MultiCare CEO Bill Robertson said in the statement. “MultiCare vigorously litigated the government’s allegations for nearly two years. The record that developed during that process speaks for itself. We are pleased to have resolved this matter and remain focused on delivering high-quality care to the communities we serve.”
The DOJ, citing court records, also noted that MultiCare had signed an agreement in 2023 to resolve the allegations but “backed out of the agreement, and then litigated the case for two years before resolving it” with the new settlement. The now-settled case stemmed from a whistleblower complaint filed in April 2022 by a former patient, the DOJ said.
Dreyer was hired by MultiCare after resigning from Providence amid allegations of misconduct, and later had his license suspended by Washington in early 2021. The DOJ said two separate physician assistants assigned to work with Dreyer in the operating room had raised patient safety concerns with management, but that it “not only permitted Dr. Dreyer to continue performing surgeries, but further incentivized Dr. Dreyer to perform medically unnecessary surgeries quickly by tying his compensation directly to the number of surgeries he performed and their complexity.”
The DOJ’s release, again citing court documents, said the U.S. Attorney’s Office contacted MultiCare directly in subsequent months to inform the system—with evidence— of its investigation regarding Dreyer’s alleged conduct at Providence. The DOJ said MultiCare permitted him to perform surgeries “with little restriction,” subsequently leading to the procedure for the whistleblower that initiated the case.
“The alleged violations by MultiCare show a wanton disregard for ethics and the medical principle to do no harm,” Washington Attorney General Nick Brown said in a statement. “This settlement is a win for patient safety and protecting public dollars to get people necessary healthcare.”
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