[June 27, 2016] OAKLAND, Calif. – Prime Healthcare has taken a double-blow as the U.S. Department of Justice released disturbing details last Friday in a Medicare fraud lawsuit against Prime, and the U.S. Supreme Court today refused to hear the company’s appeal of an anti-trust lawsuit against healthcare workers.
“Prime continues to misuse the court system to try to silence workers who speak out about problems in the hospital system, but fortunately the courts see right through it and keep dealing the company high-profile and embarrassing defeats,” said Dave Regan, president of SEIU-United Healthcare Workers West (SEIU-UHW). “If Prime put into providing quality healthcare a fraction of the effort they put into endless litigation, everyone would be better off.”
The Department of Justice, which last month announced it was intervening in an employee’s whistlebower lawsuit against the company, released new damning information about Prime’s business practices. According to the Department of Justice complaint, Prime Healthcare and its CEO, Prem Reddy, engaged in the following deceptive conduct:
- Ordered newly acquired hospitals to arbitrarily admit 20 percent to 30 percent of emergency department patients who are on Medicare for inpatient treatment, which brings a higher reimbursement rate for the hospital than outpatient care; and
- Ordered all patient forms to remove mention of outpatient treatment options, thereby leading some doctors to believe they had to admit patients for routine conditions, which falsely increased the company’s profits;
The complaint described growing pressure within the company to needlessly admit patients, in what at times resembled a twisted competition.
- One former Prime executive sent an email to an emergency department director proposing a wager of two bottles of wine against two tickets to a professional basketball game if the director identified 30 more patients who could have been admitted rather than be discharged from the emergency room.
- In another case, the emergency department director at San Dimas Community Hospital emailed physicians to say: “Our admission percentage is down the past few weeks…I know this is a pain in the ass, but it’s the way it is and if we actually can get close to [Prime’s] goal we’ll make more $$.”
- Another emergency department director complained that Reddy wanted to admit patients for overnight stays to treat minor ailments such as ear infections and urinary tract infections.
Attempts to settle the Prime employee’s lawsuit have been exhausted and the prospect of a trial is now likely. If the case goes to trial and Prime Healthcare is found guilty of violating the law, it could be barred under federal law from receiving Medicare funding, a huge financial blow to the company.
Meanwhile, the U.S. Supreme Court refused to hear Prime’s appeal of a decision by the U.S. 9th Circuit Court of Appeals from March 2016 that dismissed an anti-trust suit Prime filed against SEIU-United Healthcare Workers West (SEIU-UHW). The company has now exhausted its appeals, which puts an end to its lawsuit.
SEIU-UHW and Prime Healthcare Services are involved in a labor dispute.