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Prime Healthcare Services
Company typePrivately held company
IndustryHealth care
Founded2001; 23 years ago (2001)
FounderPrem Reddy
HeadquartersOntario, California, U.S.
Number of locations
45[1] (2020)
Key people
Prem Reddy, Chairman
ProductsHealth care services
Number of employees
50,000[2] (2021)
Websiteprimehealthcare.com

Prime Healthcare Services was founded in 2001, and is based in Ontario, California. As of August 2021, Prime owns and operates 45 hospitals in 14 states. It is affiliated with the non-profit Prime Healthcare Foundation, which operates 14 of the 45 hospitals as non-profit.[3] Prime is known both for turning around failing small hospitals and controversial billing practices, some of which have led to fraud settlements.

Origins

In 1994, Prem Reddy, the founder of Prime Healthcare, built Desert Valley Hospital in Victorville in response to a growing shortage of hospital beds in the Inland Empire.[4] Four years later, Reddy sold the management company and Desert Valley Medical Group to PhyCor, a publicly traded company based in Tennessee. PhyCor immediately floundered, however, and in 2001, as part of a legal settlement, Reddy founded Prime Healthcare Services Inc. to repurchase Desert Valley Hospital, which at that point was nearing bankruptcy.[4]

It was at Desert Valley that Reddy and his associates developed a model of health services that would prove successful in turning around small, financially distressed hospitals.[5] Following the purchase of Chino Valley Medical Center through bankruptcy court In 2005, Prime began a rapid expansion by acquiring Sherman Oaks, Montclair, Huntington Beach, and West Anaheim hospitals, all in Southern California.[6]

National Growth

By 2011, Prime had grown to 14 hospitals in California. Prime then made its first acquisition outside California, purchasing the 88-bed Harlingen Medical Center in Texas.[7] Prime went on to acquire 22 hospitals in rapid succession in Pennsylvania, Nevada, Michigan, Missouri, Texas, Indiana, Alabama, Rhode Island, and New Jersey, becoming the fifth largest and fastest growing for-profit hospital system in the country.[2]

Quality Honors

In 2021, five Prime hospitals were named among the 100 Top Hospitals by IBM Watson Health.[8] In addition, Prime hospitals have been recognized with awards for clinical excellence in a variety of specialties by Healthgrades.[9] Prime received top safety awards in Spring 2021 from the Leapfrog Hospital Safety Grade.[10]

Charity and Prime Healthcare Foundation

The Prime Healthcare Foundation operates 14 not-for-profit community-based hospitals.[11] In response to the surge of COVID-19 in India in spring of 2021, Prime Healthcare supplied ventilators, bipap machines, oxygen concentrators and associated equipment.[12]

Controversy

In 2007, the Los Angeles Times ran a news story that alleged that the policies of Prime HealthCare Services, Inc., resulted in higher-than-average profits for the possible cost of patient care: "When Reddy's company, Prime Healthcare Services Inc., takes over a hospital, it typically cancels insurance contracts, allowing the hospital to collect steeply higher reimbursements. It has suspended services — such as chemotherapy treatments, mental health care and birthing centers — that patients need but aren't lucrative.... On four occasions since 2002, inspectors have found that Prime Healthcare facilities failed to meet minimum federal safety standards, placing their Medicare funding at risk."[13]

In 2008 the State of California and Kaiser Permanente each sued Prime Healthcare over its balance billing practices and Kaiser obtained an injunction preventing Prime from continuing the practice; Prime had cancelled agreements with insurance companies when it acquired hospitals, leaving patients in an out-of-network situation resulting in higher costs, and has been aggressively pursuing patients including sending unpaid costs to collection agencies.[14] This was the first of several suits between Prime and Kaiser. In June 2010 Kaiser sued Prime Healthcare for "trapping patients" and contended that Prime Healthcare needlessly admitted emergency department patients, rather than transfer them to Kaiser facilities and then sending their insurance companies highly inflated bills.[15] Prime counter-sued Kaiser and the Service Employees International Union, claiming that Kaiser owed it $100 million in unpaid medical claims and that Kaiser and the union conspired to keep Prime out of the market;[16] that suit was dismissed in 2012,[17] and Prime appealed all the way to the US Supreme Court, which declined to hear the case in 2016.[18] In 2015 both sides agreed on dropping their respective lawsuits and resolve them through confidential and binding arbitration.[16]

In 2010 Prime Healthcare came under investigation by the US Department of Health and Human Services and the California Department of Justice about concerns over a reported spike in sepsis. The investigation centers around whether the spike in sepsis represents a large public health issue or multimillion-dollar Medicare fraud. Six Prime hospitals ranked in the 99th percentile of U.S. hospitals for sepsis and five were in the 95th percentile.[19] In 2011 Prime Healthcare Service had high rates of kwashiorkor among its elderly patients. At Shasta Regional Medical Center, Prime reported 16.1% of its Medicare patients suffered from kwashiorkor, but California's average for Medicare patients is 0.2%.[20] In 2011 California Watch reported that Prime Healthcare had a practice of transferring high numbers of patients from its emergency department to its hospital beds, specifically with patients on Medicare. Some families describe being trapped by doctors at Prime facilities and were unable to see their own doctor at another facility. Former Prime employees have described an orchestrated campaign of admitting Medicare and Kaiser patients, moving them from the emergency department to a hospital bed, in the interest of changing the fortune of a money-losing hospital.[21] In September 2011, California Attorney General Kamala Harris rejected the approval for the sale of the Victor Valley Global Medical Center in Victorville, California, and stated that the sale would not be in the public interest.[22]

In 2012, two executives at Prime Healthcare Services disclosed a patient's chart to multiple media outlets without the patient's express written consent. The release was in response to a California Watch article on Prime Healthcare Services billing practices at Shasta Regional Medical Center, which included claims by a Darlene Courtois about her treatment by Shasta. In this incident, Randall Hempling, the hospital CEO, and Dr. Marcia McCampbell, its chief medical officer, showed up at the offices of the Redding Record Searchlight and successfully convinced the paper's editor not to publish an article, echoing the California Watch claims by reference to Courtois' actual medical records.[23]

In May 2016 US Department of Justice joined a qui tam case against Prime Health Care and its chief executive concerning Medicare fraud.[24] The case was settled in August 2018 for $65 million, resolving the "allegations that 14 Prime hospitals in California knowingly submitted false claims to Medicare by admitting patients who required only less costly, outpatient care and by billing for more expensive patient diagnoses than the patients had (a practice known as "up-coding")."[25] An additional case was settled in February 2019 for $1.25 million for similar allegations regarding two Prime hospitals in Pennsylvania.[26]

In July 2021 US Department of Justice announce another settlement with Prime Health Care and its CEO Prem Reddy concerning kickbacks, overcharging for medical implants, and billing for a non-eligible provider by using another provider's billing identity. Dr. Reddy paid $1,775,000; and Prime paid $33,725,000.[27]

References

  1. ^ "Prime Healthcare Locations". Prime Healthcare Services. Archived from the original on 1 May 2021. Retrieved 28 May 2021.
  2. ^ a b "Factsheet | Prime Healthcare | About Us". Prime Healthcare Services. Archived from the original on 1 May 2021. Retrieved 28 May 2021.
  3. ^ "Awards | Prime Healthcare | Top 15 U.S Health Systems". Prime Healthcare Services (Press release). Retrieved 2021-10-12.
  4. ^ a b Bennett, William. "Reddy returns to Desert Valley Medical (originally ran in 2001)". vvdailypress.com. Retrieved 2021-10-12.[dead link]
  5. ^ "Prime Healthcare completes $350M acquisition of St. Francis Medical Center from Verity". Healthcare Finance News. Retrieved 2021-10-12.
  6. ^ "Doctor sews up hospital deal". www.tmcnet.com. Retrieved 2021-10-12.
  7. ^ "MedCath sells Texas hospital to Prime Healthcare". Modern Healthcare. 2007-02-07. Retrieved 2021-10-12.
  8. ^ "Watson Health 100 Top Hospitals - Overview". www.ibm.com. Retrieved 2021-10-12.
  9. ^ "Healthgrades America's Best Hospitals | Hospital Rankings". www.healthgrades.com. Retrieved 2021-10-12.
  10. ^ "Home | Hospital Safety Grade". www.hospitalsafetygrade.org. Retrieved 2021-10-12.
  11. ^ "Prem Reddy, MD, FACC, FCCP, Chairman, President & CEO Prime Healthcare". Prime Healthcare Services. Retrieved 2021-10-12.
  12. ^ "Prime Healthcare" (Press release). Archived from the original on 2021-05-26. Retrieved 2021-05-26.
  13. ^ Daniel Costello, Hospital group rejects system and cashes in Archived 2011-06-01 at the Wayback Machine, July 8, 2007
  14. ^ Costello, Daniel (2 July 2008). "Hospital operator is sued by state". Los Angeles Times. Archived from the original on 24 October 2015. Retrieved 2 January 2018.
  15. ^ Pfeifer, Stuart (February 1, 2015). "Hospital chain Prime Healthcare faces a fight to grow – LA Times". Los Angeles Times. Archived from the original on November 15, 2017. Retrieved November 14, 2017.
  16. ^ a b Schencker, Lisa (February 10, 2015). "Kaiser, Prime drop long-running court battles; Kaiser isn't backing Prime hospital purchase". Modern Healthcare.
  17. ^ "Prime Healthcare's Antitrust Lawsuit Against Kaiser, SEIU Dismissed". Beckers Hospital Review. September 18, 2012. Archived from the original on January 2, 2018. Retrieved January 2, 2018.
  18. ^ Beard, Kathryn (June 30, 2016). "After denying cert in health law cases, SCOTUS ends term". Wolters Kluwer Legal & Regulatory U.S. Archived from the original on January 2, 2018. Retrieved January 2, 2018.
  19. ^ William, Lance; Christina Jewett (October 11, 2010). "Hospital chain's high infection rate leads to fraudulent billing concerns". California Watch. Archived from the original on August 31, 2011. Retrieved March 18, 2011.
  20. ^ Williams, Lance; Christina Jewett; Stephen K. Doig (February 19, 2011). "Hospital chain, already under scrutiny, reports high malnutrition rates". California Watch. Archived from the original on August 11, 2011. Retrieved March 18, 2011.
  21. ^ Jewett, Christina; Doig, Stephen K. (July 23, 2011). "Chain profits by admitting ER patients". California Watch. Archived from the original on November 6, 2011.
  22. ^ "Attorney general denies sale to controversial hospital chain | California Watch". californiawatch.org. Archived from the original on 2014-08-08. Retrieved 2014-07-30.
  23. ^ "Her case shows why healthcare privacy laws exist - Los Angeles Times". articles.latimes.com. Archived from the original on 2014-04-03. Retrieved 2014-07-30.
  24. ^ Sisson, Paul (May 25, 2016). "Justice Department accuses Ontario-based hospital chain of cheating Medicare system". Los Angeles Times. Archived from the original on May 26, 2016. Retrieved May 26, 2016.
  25. ^ "Prime Healthcare Services and CEO to Pay $65 Million to Settle False Claims Act Allegations". 2018-08-03. Archived from the original on 2018-08-10. Retrieved 2018-08-09.
  26. ^ "Prime Healthcare Services and CEO, Dr. Prem Reddy, to Pay $1.25 Million to Settle False Claims Act Allegations". U.S. Department of Justice. 14 February 2019. Archived from the original on 4 July 2021. Retrieved 4 May 2021.
  27. ^ "Prime Healthcare Services and Two Doctors Agree to Pay $37.5 Million to Settle Allegations of Kickbacks, Billing for a Suspended Doctor, and False Claims for Implantable Medical Hardware". U.S. Department of Justice. 19 July 2021. Archived from the original on 19 July 2021. Retrieved 20 July 2021.

External links

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