Providence Health has agreed to pay $22.7 million to settle allegations of Medicare and Medicaid fraud, officials announced Tuesday.
The Renton, Wash.-based health system employed two neurosurgeons who allegedly falsified or exaggerated patient diagnoses and overperformed procedures that were not medically appropriate or medically necessary between 2013 and 2017 at St. Mary's Medical Center in Walla Walla.
Providence received employee complaints about the two surgeons and placed both on administrative leave. The surgeons both eventually resigned. But the system did not report either doctor to the National Practitioner Data Bank, as required by federal law. The database collects information on medical malpractice payments and professional competence or conduct and makes information available to other systems and healthcare entities. It also did not report either doctor to the Washington State Department of Health, according to the settlement.
Providence is now operating under a Corporate Integrity Agreement with the U.S. Department of Health and Human Services Office of Inspector General, which dictates the system have outside annual claims and clinical quality system reviews, provide annual compliance reports and create a compliance committee. The settlement agreement referred to the neurosurgeons as 'Dr. A' and 'Dr. B.'
"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," said Vanessa R. Waldref, United States Attorney for the Eastern District of Washington, in a news release. "I am also gravely concerned that Providence's decision not to report Dr. A or Dr. B to federal or state medical oversight bodies allowed both surgeons to simply resign from Providence and then continue to endanger patients at other hospitals."
Both surgeons were paid based on a mix of the number of surgical procedures and the level of complexity of a surgery. According to the settlement, one the surgeons was a top-producing neurosurgeons in the entire Providence system at the time, and made between $2.5 and $2.9 million a year. The settlement came out of a whistleblower complaint filed by the former Providence St. Mary's medical director of neurosurgery, Dr. David Yam, who according to his Linkedin account, left the system in June 2019.
Providence in a statement said it initiated an internal review of policies, practices and procedures.
"We are committed to taking specific, concrete actions to ensure this isolated incident in Walla Walla does not happen again," wrote Michael Connors, a spokesman for Providence, which operates 52 hospitals in seven states. "Providence has strong existing protocols and safeguards to ensure we deliver quality care and make continuous improvements that further enhance those protocols and safeguards."