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Providence agrees to pay $22 million in medical fraud case

April 13, 2022 GMT

SPOKANE, Wash. (AP) — Providence Health & Services Washington has agreed to pay $22.6 million to resolve allegations that its Walla Walla hospital fraudulently billed Medicare, Medicaid and other federal health care programs for medically unnecessary neurosurgery procedures, prosecutors said Tuesday.

Vanessa R. Waldref, U.S. Attorney for the Eastern District of Washington, and Bob Ferguson, the Washington state Attorney General, announced the settlement between Providence, the U.S. and the state of Washington, which administers Washington’s Medicaid program using a combination of state and federal funding.

It is the largest-ever health care fraud settlement in the Eastern District of Washington, Waldref’s office said in a statement.

Providence operates 51 hospitals in seven western U.S. states, including Providence St. Mary’s Medical Center in Walla Walla, Washington.

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The hospital did not immediately return phone calls seeking comment.

Between 2013 and 2018, Providence St. Mary’s employed neurosurgeons identified in the settlement agreement as Dr. A and Dr. B, Waldref’s office said in a statement.

Providence St. Mary’s paid neurosurgeons on a system that provided them a financial incentive to perform more surgical procedures of greater complexity. Between 2014 and 2018, Providence paid Dr. A between $2.5 million and $2.9 million per year, the statement said.

Tuesday’s settlement resolves allegations that Providence falsely billed Medicare, Washington State Medicaid and other federal health care programs for deficient and medically unnecessary neurosurgery procedures performed by Dr. A and Dr. B.

“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,” Waldref said.

“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,” Waldref said.

“Patients trust their doctors that the care they receive is necessary, particularly when they are undergoing neurosurgery,” Ferguson said. “Performing unnecessary surgeries for profit is a betrayal of that trust.”

As part of the settlement agreement, Providence admitted that hospital employees expressed concerns that Dr. A and Dr. B were endangering the safety of patients, had performed surgery on candidates who were not appropriate for surgery and failed to properly document their procedures and outcomes.

Providence admitted that, while it eventually placed both Dr. B and Dr. A on administrative leave in February 2017 and May 2018, respectively, it allowed both doctors to resign while on leave, and it did not take any action to report Dr. A or Dr. B to the appropriate authorities.

As part of the settlement, Providence agreed to implement and maintain a number of quality-of-care and patient safety obligations. Additionally, Providence must retain outside experts to perform annual claims and clinical quality systems reviews.

The case began in January 2020, when the former medical director of neurosurgery at Providence-St Mary Medical Center filed a complaint with the federal court.