Image of Providence St. Mary’s Medical Center in Walla Walla, Washington

Providence Health & Services agreed to pay $22.7 million to resolve allegations that two of its neurosurgeons incorrectly billed federal health programs for medically unnecessary spinal surgery. DOJ).

The health system, the U.S. federal government and the state of Washington reached a joint settlement Tuesday following a whistleblower complaint alleging that two spinal surgeons employed at Providence St. Mary’s Medical Center in Walla Walla provided poor care and committed billing fraud as of 2013 would have until 2018.

Providence, a large health care system with 51 hospitals in seven states, paid neurosurgeons based on a productivity metric, which gave them a financial incentive to perform more surgeries of greater complexity, the DOJ claimed. From 2014 to 2017, one of the affected surgeons earned between $2.5 million and $2.9 million per year under this settlement agreement, based on this metric.

The health system acknowledged that during the time the spinal surgeons were employed, other medical workers raised concerns that they were putting patients at risk, performing surgeries with complications, performing surgeries on patients that were inappropriate, and not adequately documenting their procedures.

Providence also acknowledged that while it eventually placed these two surgeons on administrative leave, it allowed both doctors to resign while on furlough and took no action to report them to the National Practitioner Data Bank or the Washington State Department of Health.

“Ensuring that surgical procedures are medically appropriate and performed properly is critical to building safe and strong communities here in Washington’s Eastern District,” U.S. Attorney Vanessa Waldref said in a press release.

“Patients with back pain and spinal injuries deserve superior care from a provider that puts the patient first and is not unduly influenced by how much they can charge for the procedure,” Waldref said. She added that Providence’s failure to ensure its doctors perform safe and necessary procedures, despite repeated warnings, “seriously endangers the lives and safety of patients.”

In a statement to MedPage Today, a Providence spokesperson said the events in question have prompted an internal investigation into policies, practices and procedures to ensure the delivery of quality care.

“We are committed to taking specific and concrete actions to ensure that this isolated incident in Walla Walla does not repeat itself,” the spokesman said. “Providence has strong existing protocols and safeguards in place to ensure we deliver quality care and make continuous improvements that continue to enhance those protocols and safeguards.”

In January 2020, a whistleblower filed a complaint alleging that two spine surgeons at Providence St. Mary’s Medical Center — Dan Elskens, MD, and Jason Dreyer, DO — provided substandard care from 2013 to 2018. Elskens and Dreyer were not named in the settlement agreement.

The whistleblower, also a neurosurgeon, found that Elskens had committed multiple surgical errors during an internal review, the complaint says, including operating on incorrect sections of the spine, which required emergency corrective surgery.

The whistleblower allegedly reported those concerns to Providence’s chief medical officer and recommended that Elskens be fired. Providence, however, rejected this original recommendation. The whistleblower then discovered that Elskens allegedly botched another operation – which nearly left the patient paralyzed – before Providence suspended Elskens.

During this time, the whistleblower also began to check the work of Dreyer, who studied with Elskens. His review found that Providence was charging the federal government for procedures that Dreyer never performed. Additionally, he complained that Dreyer was “creating patient diagnoses and treatments to justify complex surgeries and increase reimbursement for both himself and Providence.”

Some of the incidents caused the federal government to pay amounts in excess of $150,000 for unnecessary and poorly conducted procedures, the complaint said. The whistleblower reported those concerns in November 2017 and again in May 2018 before Providence suspended Dreyer, they allege.

Both Elskens and Dreyer resigned during their suspensions, according to the complaint. Elskens’ medical approval has been restricted in Washington and Michigan, but remains active in Indiana and Ohio. Dreyer’s medical license remains active in Washington and Michigan, and the state medical boards have taken no action.

The whistleblower will receive about $4 million as a result of the settlement.

  • Amanda D’Ambrosio is a reporter on MedPage Today’s corporate and investigative team. She covers obstetrics, gynecology and other clinical news and writes features about the US healthcare system. Follow