MultiCare Health System, based in Tacoma and operating MultiCare Deaconess Hospital and MultiCare Rockwood Clinic in Spokane, has agreed to pay $3.7 million to settle federal and state allegations that it endangered patient safety and fraudulently billed Medicare, Medicaid, and other federal health care programs for unnecessary spinal surgeries performed by Dr. Jason Dreyer between 2019 and 2021.
The settlement follows two years of litigation by the United States and the State of Washington. It is part of a broader investigation into unnecessary neurosurgery procedures that previously resulted in a $22.7 million settlement with Providence Health & Services, Dr. Dreyer’s former employer, in 2022 (https://www.justice.gov/usao-edwa/pr/providence-health-services-agrees-pay-227-million-resolve-liability-medically), as well as a $1.1 million individual settlement with Dr. Dreyer himself in 2023 (https://www.justice.gov/usao-edwa/pr/former-physician-pay-more-11-million-resolve-allegations-he-performed-medically).
According to court records, MultiCare admitted to hiring, credentialing, and supervising Dr. Dreyer while failing to act on multiple warnings from staff about patient safety concerns. The investigation found that two physician assistants raised concerns directly with management—one even leaving the operating room during surgery out of fear for patient harm—yet MultiCare did not restrict Dr. Dreyer’s surgical privileges or address the reported risks.
Despite being notified by federal investigators about concerns regarding Dr. Dreyer’s conduct at his previous employer, MultiCare continued to allow him to perform surgeries until the Washington State Department of Health intervened.
Pete Serrano, First Assistant U.S. Attorney for the Eastern District of Washington, stated: “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… 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 documents also indicate that after initially agreeing to settle these allegations in August 2023 but then withdrawing from that agreement, MultiCare litigated for two more years before reaching this resolution.
“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,” said Serrano.
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… This settlement is a win for patient safety and protecting public dollars to get people necessary healthcare.”
Robb R. Breeden of HHS-OIG added: “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 Defense Criminal Investigative Service; U.S. Office of Personnel Management Office of Inspector General; Department of Veterans Affairs Office of Inspector General; as well as Washington’s Medicaid Fraud Control Division.
The legal action began when former patient Dr. Deannette Palmer filed a qui tam complaint under seal in April 2022 (https://www.justice.gov/usao-edwa/pr/united-states-and-state-washington-file-false-claims-act-complaint-against-multicare). Under today’s agreement she will receive approximately $634,000—17% of the total settlement—as allowed under whistleblower provisions.
This case highlights ongoing efforts by multiple agencies over several years targeting healthcare fraud involving both individuals like Dr. Dreyer—who has since been excluded from Medicare—and institutions such as Providence Health & Services (https://www.justice.gov/usao-edwa/pr/providence-health-services-agrees-pay-227-million-resolve-liability-medically) implicated alongside MultiCare.
