Quick Answer: MultiCare Health System has agreed to pay $3,728,000 to settle federal and state allegations that it knowingly endangered patient safety and fraudulently billed Medicare, Medicaid, and other federal healthcare programs for medically unnecessary spinal surgeries performed by neurosurgeon Dr. Jason Dreyer at Deaconess Hospital in Spokane between 2019 and 2021. Two physician assistants raised safety concerns to management — one physically walked out of the operating room during surgery. MultiCare kept billing.
A physician assistant walks out of the operating room mid-surgery because they fear the patient is being harmed. They go straight to management. Another PA raises the same concerns and eventually resigns rather than keep working with this surgeon. The U.S. Attorney’s Office contacts the hospital and says, “We’re investigating this doctor for performing unnecessary surgeries.” And what does the hospital do? It keeps scheduling surgeries. It keeps billing Medicare. It keeps cashing checks.
That’s the story of MultiCare Health System, and it should make your blood boil.
What Did MultiCare Health System Do?
On February 4, 2026, the U.S. Attorney’s Office for the Eastern District of Washington announced that MultiCare Health System — a 13-hospital health system based in Tacoma, Washington — will pay $3,728,000 to resolve fraud allegations tied to former neurosurgeon Dr. Jason A. Dreyer.
The allegations are straightforward and damning: MultiCare knowingly allowed a surgeon to perform medically unnecessary spinal surgeries at Deaconess Hospital in Spokane between 2019 and 2021, then fraudulently billed Medicare, Medicaid, and other federal healthcare programs for those procedures.
The Daily Money Brief — Free, at 10 AM
Money you may be owed, scams to dodge, and the fine print decoded — the consumer money news that affects your wallet, every weekday.
But the money is not the real story. The real story is what happened inside those operating rooms — and how many people tried to stop it before anyone listened.
The Red Flags MultiCare Ignored
What you might not know about me is that the start of my professional career was in the medical field. I studied at Georgetown University’s ophthalmic technology program and spent time in operating rooms assisting with eye surgery. I know what an operating room feels like. I know the trust that exists between the surgical team and the patient on that table. I know that when something goes wrong in an OR, you feel it in your bones.
When a physician assistant physically walks out of an operating room mid-surgery because they fear the patient is being harmed, that is not a minor complaint. That is a five-alarm fire. And MultiCare treated it like a suggestion box comment.— Steve Rhode
Here is what federal prosecutors say happened:
- Within months of Dr. Dreyer starting at MultiCare, two physician assistants assigned to work with him raised patient safety concerns directly with management
- The first PA physically walked out of the operating room during a surgery out of fear of patient harm and immediately reported the incident to management
- The second PA raised similar concerns and resigned rather than continue working with Dr. Dreyer
- In February 2020, the U.S. Attorney’s Office directly informed MultiCare that it was investigating allegations Dreyer was performing unnecessary surgeries, harming patients, and falsifying diagnoses
- MultiCare was provided documentation supporting those concerns
- Despite all of this, MultiCare did not stop or meaningfully curtail Dr. Dreyer’s surgical practice
- When the Washington State Department of Health finally restricted Dreyer’s license in March 2021, it was over MultiCare’s objection
Read that last point again. The state health department had to step in to stop the surgeries, and MultiCare fought it.
Why Did MultiCare Keep Dr. Dreyer Operating?
Follow the money. It always comes back to the money.
The Financial Incentive: When MultiCare hired Dr. Dreyer, they gave him a performance-based compensation package that promised up to $1.75 million in additional pay if he performed a certain volume and complexity of surgeries. Federal prosecutors say this directly incentivized Dreyer to perform surgeries that were not medically necessary.
Think about that structure for a moment. You tie a surgeon’s paycheck to how many surgeries they perform. Then when your own staff tells you the surgeon is doing unnecessary procedures, you do nothing. Because stopping the surgeon stops the revenue.
“The alleged violations by MultiCare show a wanton disregard for ethics and the medical principle to do no harm,” said Washington Attorney General Nick Brown.
He’s right. But I’d go further. This isn’t just a violation of medical ethics. This is a system that was designed to produce exactly this outcome.
This Was Not Dr. Dreyer’s First Time
Here is where the story gets even worse. Dr. Dreyer was already under investigation when MultiCare hired him.
Between 2013 and 2018, Dreyer worked as a neurosurgeon at Providence St. Mary’s Medical Center in Walla Walla, Washington. According to IRS filings, he was the second-highest paid employee in the entire Providence system, earning over $3 million per year in base pay, incentive bonuses, and other compensation.
Providence also faced allegations that it received complaints about Dreyer endangering patients and did nothing. When Dreyer eventually left Providence, the hospital allowed him to resign rather than reporting him to the National Practitioner Data Bank or the state Department of Health — which would have flagged him to future employers.
The Pattern: Providence let Dreyer leave quietly. MultiCare hired him. MultiCare ignored the same warnings. Two health systems, two cover-ups, and patients suffered through both of them. Providence paid $22.7 million — the largest healthcare fraud settlement in the Eastern District of Washington’s history. Now MultiCare pays $3.7 million. Dr. Dreyer personally paid $1.1 million, surrendered his license, and is banned from Medicare for nine years.
The total bill across all settlements: over $27.5 million in taxpayer-funded healthcare fraud, all tied to one surgeon that two hospital systems refused to stop.
How Does Healthcare Fraud Create Medical Debt?
This is where this story connects directly to what I do every day at GetOutOfDebt.org.
When a surgeon performs an unnecessary spinal surgery, the patient doesn’t just suffer physically. They suffer financially. Co-pays, deductibles, out-of-network charges, follow-up care, rehabilitation, time off work, lost income. Even with insurance, a complex spinal surgery can leave a patient with tens of thousands of dollars in out-of-pocket costs.
And here’s the part that makes me angry: medical debt is the number one reason people contact me.
Approximately 100 million Americans carry some form of medical debt. Two-thirds of all bankruptcies in this country are caused by medical bills. And cases like MultiCare show you that some of that debt was generated by procedures that never should have happened in the first place.
Healthcare fraud and medical debt are two sides of the same coin. The system generates unnecessary procedures, bills the government and the patient, and when the patient can’t pay, they end up drowning in debt from a surgery they never needed.
The Whistleblower Who Made This Possible
The only reason we know about this is because of one person’s courage.
In April 2022, Dr. Deannette Palmer — a former patient of Dr. Dreyer’s — filed a whistleblower lawsuit under the False Claims Act in U.S. District Court for the Eastern District of Washington. That lawsuit was filed under seal, meaning it was kept confidential while the government investigated.
Without whistleblowers like Dr. Palmer, these cases would never see the light of day. The False Claims Act allows private citizens who discover fraud against the government to file suit on the government’s behalf — and to receive a share of any recovery. In the Providence settlement, the whistleblower received over $4 million.
What MultiCare Says
MultiCare’s official response is exactly what you’d expect from a corporation caught doing something it shouldn’t have been doing.
The settlement “does not involve any admission of liability or determination of wrongdoing,” MultiCare said. CEO Bill Robertson stated the organization is “confident in the quality of care provided to our patients.”
Let that sink in. Two physician assistants walked away from the operating room. The federal government told them their surgeon was under investigation. The state had to step in to stop surgeries over MultiCare’s objection. And they’re “confident in the quality of care.”
No admission of wrongdoing. $3.7 million is a rounding error for a 13-hospital health system. That’s the cost of doing business.
How Healthcare Fraud Mirrors Financial Fraud
I’ve spent over 30 years helping people deal with the aftermath of predatory systems. Whether it’s debt settlement companies, credit counseling mills, or fraudulent healthcare billing, the pattern is identical:
- They exploit trust. You trust your doctor. You trust your hospital. Just like you trust the debt relief company that promises to cut your debt in half.
- They profit from volume. Dr. Dreyer got paid more for doing more surgeries. Debt settlement companies get paid more for enrolling more clients. The incentive is always to do more, not to do right.
- They ignore internal warnings. MultiCare’s own PAs told them patients were being harmed. I ran a credit counseling organization and watched salespeople lie to meet quotas. The people on the front lines know. Management doesn’t want to hear it.
- They leave you with the bill. The hospital collects its fees. The surgeon gets his bonus. And you’re left with the medical debt, the physical damage, and the emotional wreckage.
The Myth: “The healthcare system is designed to protect patients.”
The Reality: The healthcare system is designed to generate revenue. Patient protection depends entirely on whether the people running it choose to prioritize it over profit — and as this case shows, that choice isn’t always made.
What to Do If You’re Buried in Medical Debt
If you’re dealing with medical debt — whether from a legitimate procedure or one you suspect was unnecessary — here are your actual options:
- Request an itemized bill. Hospitals make billing errors constantly. Get every charge in writing and review it line by line.
- Negotiate directly with the provider. Many hospitals will reduce bills significantly if you ask. Some have financial assistance programs they don’t advertise.
- Don’t ignore the debt. Medical debt can go to collections and affect your financial life. Deal with it, even if that means seeking professional guidance.
- Understand that bankruptcy may be an option. Medical debt is dischargeable in bankruptcy. If your medical bills have broken the math, a bankruptcy means test can help you understand if you qualify for a fresh start.
- Talk to someone who gives you ALL your options. Not someone who profits from steering you one direction. Use a tool like Find Your Path to understand every choice available to you.
- If you suspect fraud, report it. The False Claims Act allows whistleblowers to report healthcare fraud against government programs. You could be the person who stops the next Dr. Dreyer.
Never cash out retirement to pay medical debt. Medical debt is unsecured. Your retirement account is protected in bankruptcy. Don’t sacrifice your future to pay a bill that might be dischargeable — or that might have been generated by fraud in the first place.
The Bigger Picture
The MultiCare settlement is part of a broader pattern. The FBI estimates that healthcare fraud costs the United States between $100 billion and $300 billion per year. That fraud drives up insurance premiums, increases out-of-pocket costs, and generates medical debt for patients who trusted the system to take care of them.
Patients treated by healthcare providers later excluded from Medicare for fraud are 14–17% more likely to die than patients treated by non-excluded physicians. They’re also 11–30% more likely to experience an emergency hospitalization. And these providers disproportionately treat low-income, minority, and disabled patients.
Healthcare fraud doesn’t just steal money from Medicare. It steals health from patients. It creates debt that destroys families. And it erodes the trust that makes the entire system function.
Key Takeaways
- MultiCare Health System will pay $3.7 million for allowing medically unnecessary spinal surgeries and fraudulently billing federal healthcare programs from 2019 to 2021.
- Two physician assistants raised patient safety alarms — one walked out of the OR mid-surgery. Management did not stop the surgeon.
- Dr. Dreyer’s compensation was tied to surgical volume, with up to $1.75 million in performance bonuses, creating a direct incentive for unnecessary procedures.
- This was the same pattern that cost Providence $22.7 million — Providence let Dreyer leave quietly, and MultiCare hired him.
- Medical debt is the #1 cause of bankruptcy in the United States, and cases like this show that some of that debt is generated by fraud.
- If you’re drowning in medical debt, know your options: negotiation, financial assistance, bankruptcy. Never cash out retirement to pay unsecured medical bills.
Debt is math wrapped in emotion. But when the math is broken because someone performed a surgery you didn’t need so they could earn a bonus, that’s not just broken math. That’s broken trust. And the people responsible need to be held accountable.
(Source: U.S. Department of Justice | Source: The Spokesman-Review | Source: Becker’s Hospital Review)
Dealing With Debt? Understanding your options is the first step. See how all your debt relief options compare — including ones most sites won’t tell you about. The Find Your Path quiz gives a recommendation based on your actual numbers, and the Scam-O-Meter checks any company’s complaint history before you sign. Federal Reserve research shows bankruptcy filers recover faster than those who don’t file.
