Consumer Federation of California

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Ontario-based Prime Healthcare medical group responded Wednesday to news the federal government is joining a Medicare fraud lawsuit against the company, denying charges it admitted patients needlessly.

The U.S. Department of Justice in June announced it was intervening in an employee’s whistleblower lawsuit against the company, which owns and operates 14 hospitals throughout the state, including facilities in San Dimas, Garden Grove, Anaheim, Inglewood and Encino.

The DOJ released new information Friday about Prime’s business practices. Specifically, Prime Healthcare and its CEO, Dr. Prem Reddy, according to the complaint, engaged in the following practices:

• The company ordered newly acquired hospitals to arbitrarily admit 20 to 30 percent of emergency department patients who are on Medicare for inpatient treatment, which brings a higher reimbursement rate than outpatient care.
• The company ordered all patient forms to remove mention of outpatient treatment options, leading some doctors to believe they had to admit patients for routine conditions.

Prime officials say the company respects physicians’ judgments.

“Physicians determine the need for inpatient admission, not hospitals,” Troy Schell, general counsel for Prime Healthcare, said in a statement. “Every admission decision is based on the clinical judgment of physicians and satisfies nationally recognized objective clinical criteria,” Schell said.

Attempts to settle the Prime employee’s lawsuit have been exhausted, according to the union that represents local health care workers, and a trial is now likely.

Continue reading on the Los Angeles Daily News website »

Tags: Federal Issues, Medical Issues