Prime, Union Trade Barbs Yet Again
Prime Healthcare's often contentious relationship with California's labor unions flared anew this week, as the for-profit hospital system traded charges with the Service Employers International-United Healthcare Workers West.
The SEIU-UHW has alleged that Prime overbilled Medicare to the tune of $93 million by admitting patients to the hospital for short hospital stays rather than keeping them in observation and not officially admitting them as inpatients.
The union claims Prime admitted some 18,000 short-stay patients it should have kept in observation care, reaping as much as $5,000 in Medicare billings per patient on average.
The union fell short of accusing Prime of illegal activities. Admission practices for short hospital stays have been a point of friction between acute care providers and auditors for the Medicare program. The auditors often claim that short-stay patients should be treated in an outpatient setting and many have been quick to overturn claims for payment. Hospitals have appealed some 800,000 of these rejected payments, clogging the federal administrative court system and prompting the Centers for Medicare & Medicaid Services to offer settlements to hospitals of such claims.
However, the SEIU-UHW asked California Attorney General Kamala Harris to consider Prime's admission practices as part of her decision as to whether Prime should be allowed to acquire the Daughters of Charity Health System, which operates six non-profit hospitals in and around San Jose and Los Angeles. Harris previously rejected Prime’s bid to purchase Victor Valley Hospital in 2011.
Prime accused the union of placing communities at risk if it succeeds in blocking the transaction.
"The fact is that Prime Healthcare is the only option to save the DCHS system and prevent inevitable closure,” said Prime Chief Executive Officer Prem Reddy, M.D. “If this acquisition is not approved by the California Attorney General, all the communities DCHS currently serves will be left with no safety-net community hospitals, thousands of jobs lost and potentially disastrous consequences for hundreds of thousands of patients left without access to care.”
Prime did secure the support this week of a local nurses chapter of the SEIU in favor of the sale.
