April 14, 2022.  The United States Department of Justice settled a case against a healthcare and hospital system for performing medically unnecessary neurological surgeries and billing federal healthcare programs for them.  Under the terms of the settlement, Providence Health & Services Washington (Providence) paid $22,960,458, divided among federal and state Medicaid, the United States, and the State of Washington.  This settlement represents the largest healthcare fraud settlement to date in the Eastern District of Washington.  The whistleblower was the former Medical Director of Neurosurgery in the hospital system, and they will receive $4,197,734 of the settlement.

According to the allegations, the two neurosurgeons employed by the hospital system gamed the hospital system’s compensation system by performing more procedures at higher complexity than were medically necessary.  One surgeon worked at the hospital system between 2013-2018 and the other only worked at the hospital system between 2015 and 2017.  Hospital staff at various points raised concerns about both surgeons’ quality of care and procedures’ medical necessity.  Both of the surgeons were placed on administrative leave due to these concerns and both resigned; however, the hospital system did not report either surgeon to the National Practitioner Data Bank or the Washington State Department of Health.  Moreover, the hospital did not refuse or refund any Medicare or Medicaid payments for surgeries performed by either physician.

The hospital billed a variety of government programs, including Washington State Medicaid, Medicare, TRICARE, VA Community Care, and FEHBP, for surgeries performed by the two neurosurgeons in question.

Not only coding for more intense procedures than necessary but also actually performing said procedures is a nightmare for patients and taxpayers.  One of the surgeons was in the 90th percentile of top producing neurosurgeons in the hospital because of the complexity and volume of surgeries performed, earning between $2.5-$2.9 million annually, and the hospital system did not perceive this as a red flag.  For lack of oversight on quality of care, patient safety, and claims, Providence entered into a Corporate Integrity Agreement (CIA) with the U.S. Department of Health and Human Services, Office of Inspector General (HHS-OIG).

“Patients with back pain and spinal injury deserve top-notch care from a provider,” said the U.S. Attorney for the Eastern District of Washington, “who puts the patient first and is not improperly influenced by how much he can bill for the procedure.”  The U.S. Attorney also noted that since the hospital system did not discipline the physicians, the surgeons could continue this fraud scheme at other healthcare facilities.  Whistleblowers in the healthcare industry are empowered to report this kind of misconduct in order to protect future patients and the solvency of taxpayer-funded healthcare programs.