California Healthline Daily Edition

Summaries of health policy coverage from major news organizations

Despite Scrutiny, Prime Healthcare Seeking To Buy Bankrupt Hospital

On Tuesday, the Prime Healthcare Services Foundation -- the not-for-profit arm of Prime Healthcare Services -- is expected to seek approval in bankruptcy court to purchase Victor Valley Community Hospital, California Watch reports.

The move could expand the reach of the hospital chain, which currently is under state scrutiny for its billing practices.


Prime Healthcare has been in the spotlight in recent months over alleged overbilling for the bloodstream infection sepsis and a rare form of malnutrition called kwashiorkor.

In May, investigators with the Department of Public Health found that 22 of the 120 Prime Healthcare patients who were diagnosed with sepsis showed few symptoms of the condition (Jewett, California Watch, 7/11). In addition, a recent California Watch investigation found that hospitals owned by Prime Healthcare reported significantly higher rates of kwashiorkor among seniors than many other nearby hospitals (California Healthline, 2/22).

State lawmakers have called for hospital licensing officials to investigate Prime Healthcare's billing procedures before providing any additional licenses to the hospital chain or its affiliates.

Prime Healthcare officials say the chain does not practice "upcoding," or billing for more serious conditions to increase revenue.

Details of Potential Purchase

In addition to judicial consent in bankruptcy court, the sale of the not-for-profit Victor Valley Community Hospital would require a public hearing and approval from California's attorney general's office. The attorney general's office previously has approved sales to Prime Healthcare, but denied the hospital chain's recent attempt to purchase Anaheim Memorial Medical Center.

Prime Healthcare has offered $35 million to purchase the 101-bed Victor Valley hospital and has pledged to contribute an additional $15 million for hospital improvements and upgrades.

According to court records, Prime Healthcare intends to continue operating Victor Valley as a not-for-profit hospital if the purchase is approved, making the facility Prime's second not-for-profit medical center. Prime Healthcare also owns thirteen for-profit hospitals (California Watch, 7/11).

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