MultiCare Health System, the Washington-based nonprofit hospital network, has been the defendant in four significant legal matters in recent years: a federal False Claims Act case over medically unnecessary spinal surgeries that settled in February 2026 for $3,728,000; a hepatitis C class action tied to a drug-diverting nurse at Good Samaritan Hospital that settled for $4 million; a $39 million wage-and-hour class action over missed meal breaks; and an active billing dispute with Optum and Change Healthcare. The MultiCare lawsuit most prominent in federal enforcement circles is the first — a whistleblower case alleging MultiCare knowingly billed Medicare and other government programs for spinal surgeries performed by a neurosurgeon it had been warned was dangerous.
The $3.7 Million Spinal Surgery Fraud Settlement
On February 4, 2026, the Department of Justice announced that MultiCare agreed to pay $3,728,000 to resolve allegations that it submitted “dozens, if not hundreds” of fraudulent claims to Medicare, Washington State Medicaid, the Department of Veterans Affairs Community Care program, TRICARE, and the Federal Employee Health Benefits program.1U.S. Department of Justice. United States and State of Washington File False Claims Act Complaint Against MultiCare Of the total, $1.6 million was designated as restitution.2U.S. Department of Justice. MultiCare Health System to Pay Millions to Settle Fraud Case
The case began as a whistleblower complaint filed in April 2022 by Dr. Deannette Palmer, a Spokane Medicare beneficiary who had been operated on by Dr. Jason Dreyer at MultiCare Deaconess Hospital in September 2020.3Foley & Lardner LLP. DOJ Call to Provider The U.S. Attorney’s Office for the Eastern District of Washington intervened, and the United States and the State of Washington jointly filed a False Claims Act complaint in January 2024.4HHS OIG. United States and State of Washington File False Claims Act Complaint Against MultiCare MultiCare signed a proposed settlement in August 2023, backed out, and litigated for another two years before the final deal.5Becker’s Hospital Review. MultiCare Pays $3.7M to Settle Medically Unnecessary Surgery Allegations
As part of the settlement, MultiCare made factual admissions acknowledging that it had hired, credentialed, and supervised Dr. Dreyer while ignoring red flags about his billing and the danger he posed to patients.2U.S. Department of Justice. MultiCare Health System to Pay Millions to Settle Fraud Case In its own public statement, MultiCare said the agreement does not constitute an admission of liability or wrongdoing, and that it settled to “avoid the cost, distraction and uncertainty of continued litigation.”6KHQ. MultiCare Health Systems to Pay $3.7 Million Settlement to Resolve Fraud Case Washington Attorney General Nick Brown called the hospital’s conduct a “wanton disregard for ethics.”7Fierce Healthcare. MultiCare Agrees $3.7M Settlement Over Allegations It Knowingly Allowed Unnecessary Surgeries Dr. Palmer received 17% of the recovery, roughly $633,760, plus attorney fees and costs paid by MultiCare.
The Warnings MultiCare Was Alleged to Have Ignored
The government’s complaint described warnings from multiple directions. Dr. Dreyer had resigned from Providence Health & Services amid allegations of unnecessary surgeries and falsified diagnoses before MultiCare hired him; Providence later paid $22.7 million in 2022 to settle its own False Claims Act case.7Fierce Healthcare. MultiCare Agrees $3.7M Settlement Over Allegations It Knowingly Allowed Unnecessary Surgeries Within two months of Dr. Dreyer joining MultiCare, patient safety complaints began.8Health Exec. Nonprofit Health System Settles Fraud Lawsuit Over Unsafe Spinal Surgeries One physician assistant walked out of an operating room mid-surgery fearing for the patient’s safety. Another resigned rather than keep assisting him.2U.S. Department of Justice. MultiCare Health System to Pay Millions to Settle Fraud Case
External warnings came too. In February 2020 the U.S. Attorney’s Office told MultiCare directly that Dr. Dreyer was under federal investigation for harming patients, falsifying diagnoses, and performing medically unnecessary surgeries at his prior employer.2U.S. Department of Justice. MultiCare Health System to Pay Millions to Settle Fraud Case The Washington State Department of Health was separately investigating him.7Fierce Healthcare. MultiCare Agrees $3.7M Settlement Over Allegations It Knowingly Allowed Unnecessary Surgeries MultiCare allowed him to continue operating with little restriction, and in October 2019 tied his compensation directly to the number and complexity of surgeries he performed.1U.S. Department of Justice. United States and State of Washington File False Claims Act Complaint Against MultiCare The Washington Board of Osteopathic Medicine and Surgery suspended his license in March 2021, and MultiCare terminated him afterward.9KREM. Spokane Physician Stripped of License, Reports Excessive Surgeries Dr. Dreyer personally paid $1.174 million in 2023 and accepted a nine-year exclusion from federal healthcare programs to resolve his own liability.3Foley & Lardner LLP. DOJ Call to Provider
The Hepatitis C Class Action at Good Samaritan Hospital
A second major MultiCare case grew out of events at Good Samaritan Hospital in Puyallup. Between August 2017 and March 2018, emergency department nurse Cora Weberg diverted injectable hydromorphone and fentanyl for her own use and then used the same needles on patients, infecting at least 12 of them with hepatitis C.10Campus Safety Magazine. Puyallup Nurse Pleads Guilty to Drug Tampering, Infecting Patients With Hepatitis C MultiCare detected her conduct through an internal review of unusually high narcotic withdrawals and then tested roughly 2,600 former patients for exposure to bloodborne pathogens.11KOMO News. State Suspends License of Nurse in Good Samaritan Hepatitis C Case Weberg pleaded guilty in September 2023 to federal drug-tampering charges carrying up to ten years in prison and a $250,000 fine.
The class action, M.N. v. MultiCare Health System, Inc., was filed in Pierce County Superior Court. It alleged that MultiCare negligently hired and inadequately supervised Weberg, exposing more than 2,600 patients to possible HIV, hepatitis B, and hepatitis C infection.12Keller Rohrback. MultiCare Health System Litigation After two mediation sessions in 2024 and 2025, the parties reached a $4 million class-wide settlement, which the court finally approved in December 2025.13MultiCare Health Settlement. Motion for Final Approval of Class Action Settlement The settlement separated patients who received care directly from Weberg from those treated at the hospital during the relevant period without direct contact. Each class member was estimated to receive about $830. The claim deadline passed in February 2026, and the deadline to cash settlement checks was June 18, 2026.14MultiCare Health Settlement. M.N. v. MultiCare Health System Settlement
The $39 Million Meal Break Settlement
In an unrelated employment case, three MultiCare employees — Shelly M. Knight, Douglas Zukowski, and Heather Faris — filed a class action in Pierce County Superior Court alleging the health system failed to properly compensate hourly workers for missed meal breaks and failed to provide second meal breaks on shifts longer than 10.5 hours. Knight, et al. v. MultiCare Health System settled through mediation in March 2024 for $39 million.15CPT Group. Knight v. MultiCare Health System Settlement Agreement The settlement covers two classes of hourly, non-exempt employees with claims spanning January 2019 through April 2024. At least $27 million of the fund was earmarked for pro-rata distribution to class members, with up to 30% going to attorney fees.16CPT Group. Knight v. MultiCare Notice of Class Action Settlement MultiCare denies wrongdoing.
MultiCare’s Active Suit Against Optum and Change Healthcare
In late December 2025, MultiCare went on offense, filing a breach-of-contract suit against Optum Inc. and Change Healthcare in King County Superior Court. MultiCare alleged that Change Healthcare failed to properly code and submit anesthesia billing for its Capital Medical Center in Olympia, that by early 2024 roughly $1.6 million in claims had gone unsubmitted or late, and that $1.2 million remained unrecoverable after a 90-day wind-down following a formal breach notice.17The News Tribune. MultiCare Sues Optum, Change Healthcare Over Outstanding Claims The defendants removed the case to the U.S. District Court for the Western District of Washington in January 2026 and deny the allegations.18Becker’s Payer. MultiCare Sues Optum, Change Healthcare Over Outstanding Claims As of late April 2026, the case was active before Judge Jamal N. Whitehead.19CourtListener. MultiCare Health System v. Optum Inc.