Prime files bid, faces new scrutiny in Calif. on billing

By Richard Asinof
Contributing Writer
Twitter: @RichardAsinof

PROVIDENCE – After a two-month delay, Prime Healthcare Services of Ontario, Calif., the prospective buyer of Landmark Medical Center, filed its application under the Hospital Conversions Act with state regulators on Jan. 2, according to Amy Kempe, spokeswoman for the Rhode Island attorney general’s office.

With the 120-day review period for the application, a final sale of Landmark and its sister facility, the Rehabilitation Hospital of Rhode Island in North Smithfield may reach into the fifth year of receivership under Jonathan N. Savage, the special master appointed by Superior Court Judge Michael A. Silverstein.

Bill Fischer, spokesman for Landmark, called the submission, which he described as a joint application from Landmark and Prime Healthcare, “a significant accomplishment.” The actual document, Fischer continued, “contains thousands of pages of documentation.”

The immediate goal, Fischer added, is to have the document “deemed complete” by state regulators at the R.I. Department of Health and the attorney general’s office. The regulators have 30 calendar days to review the document and to either deem it complete or ask for more documentation.

Fischer said that operations at Landmark “had been running smoothly, with a pretty good up tick in patient census in the past couple of weeks.”

In California, a report published on Dec. 20, 2012, by California Watch, an investigative reporting group, found that Prime Healthcare has allegedly changed its billing practices regarding kwashiorkor, a severe nutritional disorder.

“After billing Medicare for treating more than 1,100 cases of a rare affliction, a Prime Healthcare Services hospital in Redding abruptly stopped last year, state health records show,” the report claimed. California Watch alleged that the change occurred soon after it had published a story about aggressive billing practices by Prime Healthcare.

“About six months after it took control of the Shasta Regional Medical Center in Redding in late 2008, Prime began billing Medicare for treating senior citizens it diagnosed with kwashiorkor, a dangerous nutritional disorder usually seen among children during famines in developing countries. At its height, the hospital’s billing for the malady surged to nearly 70 times the state average,” the report further claimed.

“The previous high rates of kwashiorkor diagnoses made the hospital eligible for about $6,000 in Medicare bonus payments for each of the more than 1,100 cases of kwashiorkor it reported over a two-year period, according to federal records. That’s $6.9 million in all,” the report said.

In response, Prime Healthcare has said that its Medicare billings are legal and accurate.

Ed Barrera, spokesman for Prime Healthcare, did not respond to a request by Providence Business News with any comment on the story.