HHS and the California Department of Justice are investigating whether the company fraudulently billed Medicare for a surge in alleged phony septicemia infections at its hospitals in 2008.
The federal investigation was requested by U.S. Reps. Henry A. Waxman and Pete Stark (both D-Calif.), based on an on an analysis by the Service Employees International Union alleging Prime overbilled Medicare by $18 million for septicemia claims.
The company denied wrongdoing, saying the allegations are “part of an effort by the SEIU to extort concessions from Prime Healthcare in contract negotiations” under way at its Centinela Hospital Medical Center. However, the Times said the state investigation was tipped off by a different source and started about a year ago.
Prime Healthcare, led by Prem Reddy, MD, has turned around money-losing hospitals by raising fees and cutting payroll and services, the Times said. The SEIU has frequently clashed with the health system over pay and staffing issues.
Read the Los Angeles Times report on Prime Healthcare Services.
Read more coverage of unions:
– Growth Seen in Unionized Healthcare Workers
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