Providence and MultiCare Health System have agreed to pay a combined $155.5 million to settle two class-action lawsuits brought by former patients of Jason Dreyer, DO, a neurosurgeon accused of performing unnecessary spine surgeries to boost his productivity, according to court documents reviewed by Becker’s.
Renton, Wash.-based Providence, Tacoma, Wash.-based MultiCare and Dr. Dreyer previously paid about $22.7 million, $3.7 million and $1.2 million, respectively, to resolve government fraud allegations tied to the surgeries.
Under the Providence agreement, filed Sept. 28 in the U.S. District Court of the Eastern District of Washington at Richland, every patient who had spine surgery performed by Dr. Dreyer or Daniel Elskens, DO, at Providence St. Mary Medical Center in Walla Walla, Wash., is eligible for $2,000. Patients can instead seek a larger payout through a review by a panel of neurosurgery experts. Both settlements still need court approval.
Providence St. Mary paid neurosurgeons based on a productivity metric that gave them a financial incentive to perform more procedures of greater complexity, according to allegations outlined in a 2022 news release from the Justice Department.
From 2014 to 2018, Dr. Dreyer was one of the highest-producing neurosurgeons across Providence’s 51-hospital system, and Providence paid him $2.5 million to $2.9 million a year from 2014 to 2017, the Justice Department said.
Providence placed Dr. Dreyer on administrative leave in May 2018 and he resigned that November. As part of its 2022 settlement with the government, Providence admitted it did not report him to the National Practitioner Data Bank or the Washington State Department of Health. MultiCare hired him in 2019 to operate at Deaconess Hospital in Spokane, Wash., despite red flags raised during the hiring process, according to a complaint the U.S. and Washington state filed against MultiCare. He resigned from MultiCare in 2021.
As part of its 2022 settlement with the government, Providence admitted that its medical staff had raised concerns that Dr. Dreyer and Dr. Elskens endangered patients, caused an excessive level of complications and negative outcomes, and operated on patients who were not appropriate candidates for surgery, according to the Justice Department. After the state of Washington restricted Dr. Dreyer’s license in 2021, MultiCare reassigned 12 of his patients who were scheduled for spine surgery to another neurosurgeon, who determined none of them were appropriate candidates for surgery, according to a complaint the U.S. and Washington state filed against MultiCare.
Both health systems called the settlements a way to avoid prolonged litigation.
“We are confident that MultiCare would have prevailed had this case gone to trial,” a MultiCare spokesperson said in a statement to Becker’s.”MultiCare’s decision to settle is a practical business decision that allows the company to avoid the cost, uncertainty and distraction of prolonged litigation and to focus resources on its mission of providing high-quality care to its patients.”
“A settlement allows us to remain focused on our Mission and the patients and communities we serve and avoids the significant cost and ongoing disruption of prolonged litigation,” a Providence spokesperson said in a statement to Becker’s. “As a high-reliability organization, we recognize the importance of continuous improvement. Throughout this process, our protocols and safeguards have been reviewed to ensure we are delivering quality care to everyone we serve.”
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