Ontario, Calif.-based Prime Healthcare Services and CEO Prem Reddy, MD, will together pay $65 million to settle False Claim Act allegations against 14 Prime hospitals.
Here are six facts:
1. From 2006 through 2013, California-based Prime hospitals allegedly knowingly admitted Medicare beneficiaries who only required outpatient care. A press release from the Department of Justice called the alleged actions "a deliberate corporate-driven scheme."
2. The settlement alleged Prime also billed for more expensive diagnoses than the patients actually had, a tactic called "up-coding." This reportedly occurred from 2006 through 2014.
3. Dr. Reddy will pay $3,250,000 and Prime will pay $61,750,000 under the settlement.
4. Ten Prime Healthcare Services-owned hospitals in California are named in the settlement: San Diego-based Alvarado Hospital Medical Center, Garden Grove Medical Center, La Palma Intercommunity Hospital, Victorville-based Desert Valley Hospital, Chino Valley Medical Center, National City-based Paradise Valley Hospital, San Dimas Community Hospital, Redding-based Shasta Regional Medical Center, West Anaheim Medical Center and Inglewood-based Centinela Hospital Medical Center.
5. Four Prime Healthcare Foundation-owned hospitals in California are also named in the agreement: Sherman Oaks Hospital, Montclair Hospital Medical Center, Huntington Beach Hospital and Encino Hospital Medical Center.
6. Prime Healthcare Services and nonprofit Prime Healthcare Foundation operate 45 acute-care hospitals in 14 states.
"Charging the government for higher cost inpatient services that patients do not need, and for higher-paying diagnoses than the patients have, wastes the country's valuable health care resources," said Acting Assistant Attorney General Chad A. Readler.