Providence Health to Pay $22.7 Million Settlement Over Healthcare Fraud at St. Mary’s Medical Center

(Walla Walla, WA) -- It's the largest settlement of its kind in the Eastern District of Washington state.  Providence Health & Services Washington has agreed to pay $22,690,458 to resolve allegations that it fraudulently billed federal health care programs at St. Mary's Medical Center in Walla Walla

The allegations began with two neurosurgeons who recommended and provided medically unnecessary and possibly dangerous surgeries to patients. Providence then billed Medicare, Medicaid, and other programs. The suit alleged that Providence St. Mary’s employed neurosurgeons identified as Dr. A and Dr. B. between 2013 and 2018. Providence St. Mary’s paid the neurosurgeons based on a productivity metric that provided them a financial incentive to perform numerous surgeries that were more complicated than they had to be.

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

In addition to the payments, Providence will be required to maintain a number of quality-of-care and patient safety obligations, as well as retain independent analysts to perform annual claims and clinical quality systems reviews.

The company released a statement following the announcement.

"We are committed to taking specific, concrete actions to ensure this isolated incident in Walla Walla does not happen again. Providence has strong existing protocols and safeguards to ensure we deliver quality care and make continuous improvements that further enhance those protocols and safeguards. We have already taken swift action to implement the terms of the corporate integrity agreement that we have reached with the U.S. Department of Health’s Office of the Inspector General."

While the corporate integrity agreement does not apply specifically to every Providence facility such as Kadlec, the company will be instituting a "broad and comprehensive internal review of our policies, practices, and procedures".

The settlement was the result of a joint investigation involving multiple agencies. You can read the full release by clicking here.