Providence Health & Services Washington (Providence) is a health care and hospital system operating in several states, specifically in western states of the U.S. At its St. Mary’s Medical Center in Walla Walla, Washington, Providence established a compensation system for its neurosurgeons based on the number and complexity of surgical procedures. This system incentivized neurosurgeons to carry out as many complex procedures as possible, leading two neurosurgeons at Providence to carry out medically unnecessary surgeries. These procedures were billed to Medicare, Medicaid, and other government-sponsored health insurance programs.
This financial compensation system led to fraudulent billing and endangered patients’ lives. Many patients were subjected to unnecessary and overly complicated surgeries. Some were not even surgery candidates. Others suffered from post-surgery complications. Providence utilized this compensation system despite the complaints raised by its medical personnel. Personnel at St. Mary’s raised concerns surrounding patient safety and the excessive complications arising from unnecessary surgeries. They also indicated that some patients were not even surgery candidates and expressed that procedures and outcomes were not properly documented.
Providence agreed to pay $22 million to settle these allegations, making it the largest health care fraud settlement in the Eastern District of Washington. Additionally, Providence entered into a Corporate Integrity Agreement with the Office of Inspector General of the U.S. Department of Health and Human Services, requiring that Providence retain outside experts to review claims and quality systems annually.