NEWS: State Senate and Assembly Health Committees Scrutinize Prime Healthcare’s Business Practices

For Immediate Release: Friday, February 24, 2012
For more information: David Tokaji, 213-300-8892

LOS ANGELES — Prime Healthcare came under fire before the State Senate and Assembly Health Committees at a joint hearing in Los Angeles today for hospital billing practices that contribute to California’s and the nation’s troubled healthcare system.

Part of the hearing focused on the hundreds of millions of dollars in profits that Prime generates from Medicare through its emergency room admissions, a strategy reported on by the Center for Investigative Reporting’s California Watch project which last week won a prestigious Polk Award for its investigative series on Prime’s controversial practices. Prime’s above-average Medicare admission rates for emergency room patients resulted in an additional $220 million in revenues from 2005 through 2009, according to the series.

“Hospitals should be about helping people get healthy, not lining their pockets with cash from taxpayer-funded programs like we believe Prime Healthcare is doing,” said Dave Regan, President of SEIU-United Healthcare Workers West (SEIU-UHW).

Such business practices are of particular concern to Californians as the state is considering  a new system to reimburse hospitals for patients covered by Medi-Cal, the state’s health insurance program for seniors, low-income families and people with disabilities. The new reimbursement model would likely be based on Medicare’s current system, one that has proven extremely profitable for Prime Healthcare..

The hearing is not the first time Prime Healthcare has come under scrutiny for its questionable—and highly lucrative—business practices. Media reports have revealed how Prime has allegedly overbilled hospitals for numerous medical conditions which receive enhanced payments from Medicare. These ailments include Kwashiorkor, a form of malnutrition usually associated with Third World starving children, and autonomic nerve disorder, a condition reported by Prime hospitals at nearly 90 times the California average.

Three California members of Congress have asked the U.S. Department of Health and Human Services’ inspector general to investigate Prime’s billing practices. FBI agents have interviewed a former Prime hospital patient and two ex-Prime employees as part of a federal inquiry into the for-profit chain’s questionable billing methods.

SEIU-UHW members work at three Prime Healthcare-owned hospitals: Centinela Hospital in Inglewood, Encino Hospital and Garden Grove Hospital. Healthcare workers testified on Prime’s questionable business practices as part of “Let’s Get Healthy California!,” a campaign by SEIU-UHW members focused on improving the quality of care and health for Californians.

SEIU-UHW members at all three facilities are in contract negotiations with Prime to improve patient care, lower healthcare costs and improve working conditions.


SEIU—United Healthcare Workers West (SEIU-UHW) is the largest hospital and healthcare union in the western United States with more than 150,000 members. We unite every type of healthcare worker with a mission to achieve high-quality healthcare for all. SEIU-UHW is part of the 2.2 million-member Service Employees International Union (SEIU), the nation’s fastest-growing union. Learn more at

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