Landmark suitor admits it is target of federal probes

LANDMARK MEDICAL CENTER suitor Prime Healthcare Services admitted to being investigated in two separate federal probes during 2012.
Posted 2/7/13

PROVIDENCE – In its application filed Jan. 2 with Rhode Island state regulators, Prime Healthcare Services of Ontario, Calif., acknowledged for the first time that it was being investigated in two separate federal probes during 2012.

  • On June 15, 2012, Prime Healthcare said it was subpoenaed by the U.S. Justice Department for documents about its Medicare billing practices, according to documents in its application.

  • On Jan. 11, 2012, Prime Healthcare said the Office for Civil Rights of the U.S. Department of Health and Human Services notified Shasta Regional Medical Center, a member of the 21-hospital network owned by Prime Healthcare, that it had initiated a compliance review regarding alleged violations of patient confidentiality laws, according to documents in its application.

The information was revealed as part of “Confidential Exhibit 22” in its application under the Hospital Conversions Act to purchase Landmark Medical Center in Woonsocket. However, state regulators, in a letter dated Jan. 4, to Cynthia Warren of Cameron & Mittelman LLP, a Providence lawyer representing Prime Healthcare, said: “Please be advised that after due review and consideration, it has been determined that these exhibits are not confidential and any (implied) request to have them held confidential relative to these applications or otherwise is hereby denied.”

The two federal investigations are related to ongoing reporting by California Watch, an investigative journalism group, which claimed that its review of federal records showed that Prime Healthcare “obtained a Medicare bonus payment of more than $6,000 after reporting it had treated the patient for kwashiorkor,” a form of severe protein and caloric malnutrition more commonly found afflicting children in sub-Saharan Africa.

Over two years, according to the California Watch, their examination of records showed that the hospital allegedly treated more than 1,000 Medicare patients for kwashiorkor – a rate more than 60 times the state average.

One of the patients who had been interviewed by the news group denied being malnourished and said she had never been treated for kwashiorkor, according to a report by California Watch. In response to that news story, Prime Healthcare officials allegedly shared the patient’s medical files with hospital employees and local media, according to California Watch. In November 2012, California regulators fined Prime Healthcare $95,000 for violating state confidentiality laws in the case. Prime Healthcare denies any wrongdoing and has appealed the decision.

Prime Healthcare has also denied any wrongdoing in both cases involving the federal investigations. Prime Healthcare claimed in the application documents that complaints about problems with Medicare billing were part of a corporate campaign directed by unions against the hospital network.

The documents and the letter can viewed on the R.I. Department of Health website, Office of Health Systems Development, under Applications Filed.

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