Prime Acknowledges Federal Probes Over Billing, Data Disclosure
Prime Healthcare Services recently acknowledged that it is facing two federal investigations, California Watch reports.
The health system disclosed the investigations last month in a filing with the health department of Rhode Island, where Prime hopes to purchase its 22nd hospital.
In March 2012, Prime said it was unaware of any federal investigations against itself (Williams, California Watch, 2/6).
Investigation ofÂ Billing Practices
Prime has come under scrutiny for allegedly submitting fraudulent bills to Medicare and Medi-Cal, California's Medicaid program.
In 2011, the California Department of Public Health looked into claims that Prime "upcoded" patient bills and referred the matter to CMS officials.
In addition, the FBI questioned former Prime staff members about the health system's billing practices.
An investigation by California Watch found that Shasta Regional Medical Center -- which is owned by Prime Healthcare Services -- billed Medicare for more than 1,000 cases of a rare form of malnutrition known as kwashiorkor over a two-year period.
The rate of billing for kwashiorkor increased significantly after Prime acquired the hospital and was 70 timesÂ higher thanÂ the state average during that period, according to the investigation.
In addition, the Service Employees International Union-United Healthcare Workers West -- which is involved in a labor dispute with Prime -- conducted research in 2008 and 2009 and found that Prime hospitals reported some of the highest rates of the bloodstream infection septicemia in the U.S. (California Healthline, 6/6/12).
In its filing with the Rhode Island Department of Health, Prime said that the U.S. Department of Justice in June 2012Â subpoenaed documents on the health system's Medicare billing practices for malnutrition and septicemia.
Prime has said that its Medicare billings are legal and proper (California Watch, 2/6).
Investigation of Patient Data Disclosure
In response to California Watch's investigation into aggressive billing practices, Randall Hempling -- Shasta's CEO -- in 2011 sent an email to 785 workers disclosing confidential information about a 64-year-old patient with diabetes.
Earlier, Hempling disclosed the patient's medical files to the editor of the Redding Record Searchlight to dissuade the publication from reprinting the California Watch story.
State officials said that all of the disclosures were illegal because they were made without the patient's permission or knowledge.
The California Department of Public Health fined Prime $95,000 for violating patient confidentiality.
DPH also issued an additional $3,100 in fines because the hospital did not report the breach to the state and the patient in a timely manner.
Prime Healthcare officials have said they are appealing the state's findings and penalties (California Healthline, 11/29/12).In its filing with Rhode Island's health department, Prime said that HHS' Office for Civil Rights is investigating the disclosure of the patient's medical data (California Watch, 2/6). This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.