Investigations
Prime Healthcare has been embroiled in numerous controversies related to Medicare fraud including but not limited to:
Sued by state for billing insured patients
In July 2008, Prime Healthcare was sued by the state of California for billing privately insured patients for unpaid medical bills or unpaid medical services received at its facilities.1 Kaiser Permanente separately sued Prime, resulting in a $1.2 million settlement in May 2010.2
Investigated for Medicare fraud of sepsis diagnoses
Prime Hospitals came under scrutiny in October 2010 by the U.S. Department of Health and Human Services (HHS) and the California Department of Justice (DOJ) for Medicare fraud involving sepsis diagnoses. This investigation followed requests for a federal probe by California Representatives Waxman and Stark due to alleged overbilling by $18 million in septicemia claims in 2008.
Investigated for alarmingly high rates of malnutrition
In February 2011, Prime Hospitals was investigated for exceptionally high rates of malnutrition, particularly billing Medicare for treating kwashiorkor, a condition traditionally associated with impoverished children during famines. The investigation raised concerns about the legitimacy of diagnoses by Prime Hospital and the financial implications to Medicare.
Investigated by FBI for overbilling Medicare
Prime Healthcare Services was investigated by the FBI in December 2011 for overbilling Medicare, allegedly through practices like "upcoding" where diagnoses were exaggerated to obtain higher reimbursements. Former coders claimed Prime CEO Dr. Prem Reddy encouraged such practices.
Investigated by FBI for patient privacy breach
In January 2012, Prime Healthcare faced FBI scrutiny for a patient privacy breach. This followed an incident where the medical records of a patient, Darlene Courtois, were discussed with the media without her explicit consent, leading to allegations of HIPAA violations.
Paid settlements for overbilling and False Claims Act violations
Prime Healthcare agreed to settlements totaling $65 million in August 2018 for overbilling allegations and False Claims Act violations, without admitting fault. Similar settlements worth $1.25 million in February 201911 and $37.5 million12 in July 2021 were made for Medicare fraud and violations of federal and California False Claims Acts, respectively.
Mentioned in article about settling lawsuits
In May 2023, Prime Healthcare was highlighted in an article regarding medical entities settling lawsuits, indicating a pattern of settling federal civil cases, totaling over $83 million paid to the U.S. government, without admitting fault. Prime Healthcare has faced severe criticism and legal repercussions for instances of medical malpractice, raising significant concerns about patient safety
Lawsuit over decapitation
at birth
In July 2023, Prime Healthcare faced a lawsuit after a doctor accidentally decapitated a baby during birth at Southern Regional Medical Center in Atlanta, GA.14 The incident, ruled a homicide in February 2024,15 revealed alleged attempts to conceal the tragedy from the parents.
Patient Treatment Violations
In June 2023, a Prime Healthcare hospital, Centinela Hospital Medical Center, was investigated for repeatedly neglecting federal requirements in patient treatment. The investigation highlighted failures in preventing potentially deadly blood clots, sparking public outrage following the death of a pregnant woman.
