[Nov. 2, 2016] LOS ANGELES – A federal judge dismissed a lawsuit brought by Prime Healthcare against California Attorney General Kamala Harris, denying allegations that she improperly restricted the sale of six non-profit hospitals in California to Prime Healthcare in 2015, a deal the company walked away from a month later.
“It’s time for Prime Healthcare to stop wasting money on fringe conspiracy theories. This most recent in a string of major losses in court should worry Prime Healthcare stakeholders concerned about the company’s ongoing legal fight with the U.S. Justice Department and the devastating financial impact a loss could have on the company,” said Dave Regan, president of SEIU-United Healthcare Workers West (SEIU-UHW). “Prime’s legal strategy has done little more than waste the court’s precious time and resources.”
The Oct. 31, 2016 ruling by U.S. District Court Judge Gonzalo Curie dismissed allegations by Prime Healthcare that Harris colluded with SEIU-UHW to undercut the company’s purchase of the Daughters of Charity Health System.
In February 2015, Harris approved – with conditions – Prime Healthcare’s $843 million purchase of the Daughters of Charity Health System and its six, safety-net hospitals in California. She ordered Prime to operate the hospitals as acute care facilities for ten years and to maintain the majority of current hospital services at each hospital.
Healthcare workers, who are members of SEIU-UHW, urged Harris to block the sale because Prime Healthcare was a bad fit to continue the hospitals’ charity mission. Prime pulled out of the deal in March 2015, and the hospitals were later sold in December 2015 to BlueMountain Capital Management, which renamed the facilities Verity Health System.
The latest ruling marks the sixth setback for Prime Healthcare in the last year:
- In October 2016, the National Labor Relations Board ordered Prime Healthcare to pay an estimated $6.5 million in lost wages to 500 employees at two Southern California hospitals after refusing to issue the negotiated annual raises each of the last five years;
- In June 2016, the S. Supreme Court refused to hear Prime Healthcare’s appeal of a decision dismissing an anti-trust suit Prime filed against SEIU-UHW, thereby ending the lawsuit;
- In May 2016, the S. Department of Justice joined a Medicare fraud lawsuit against Prime Healthcare, saying it found merit to the claims brought by a Prime employee who said the company increased corporate revenue by wrongly admitting Medicare patients for overnight stays;
- In February 2016, a judge from the NLRB ordered Prime Healthcare to honor a contract agreement affecting 1,100 of its employees in Southern California that the company had refused to implement since November 2014; and
- In November 2015, the NLRB issued a decision requiring Prime Healthcare to reimburse 630 employees at Centinela Medical Center in Inglewood, Calif. an estimated $1.6 million for illegally cutting workers’ healthcare benefits over a five-year period.
More than 1,100 employees at Prime Healthcare-owned hospitals in Southern California are members of SEIU-UHW, which has a labor dispute with the company.