REPORT: PRIME OVERBILLED COSTLY DIAGNOSES TO MEDICARE
By Steven Tavares
Steven.tavares@eastbaycitizen.com
@eastbaycitizen on twitter


In June 2009, a slight, dark-skinned Indian man with a bright smile and the words of fast-talking carnival barker thoroughly aroused the hopes and dreams of hundreds of San Leandro when he proclaimed he, not the reviled Sutter Health, would save their hospital.

You Almost Fooled Us: Prime CEO Dr. Prem Reddy.
His words were confident. His intentions appeared pure. His invective against Sutter was heard first-hand by the company brass sitting quietly among supporters of San Leandro Hospital. The self-proclaimed small town cardiologist who became a pulled-up-by-the-bootstraps multi-millionaire by gobbling up bankrupt hospitals and bringing them back to life–sometimes within a year–was offering to do the same favor for San Leandro.
Residents hungry for a savior rose to their feet with thundering applause and renewed confidence. Sutter could no longer say it didn’t have a buyer, their knight in shining armor was glowing before their eyes with the warm, yellow light of God shining upon him.



His name is Dr. Prem Reddy. His company Prime Healthcare made romantic overtures for San Leandro Hospital, but was subsequently scared away by Sutter. Many in this area, detest Sutter and its heavy-handed market share and the ridiculous notion it functions as a non-profit business, but say this about them: they did us a favor. After yet another report this weekend of impropriety by the Southern California-based Prime, it is clear San Leandro dodged a major bullet.

Prime is alleged to overbilled Medicare for up to $18 million in fraudulent claims, according to California Watch. Reports of high rates of patients diagnosed with septicemia and a rare condition called kwashiorkor were detailed at Prime’s Southern California facilities. Incidentally, treating both conditions could potentially bring Prime an increased windfall from Medicare, according to the article. The health care provider denied the assertion and said its higher level of screening for septicemia was one of the cause for the high rate of diagnosis.

In hindsight, Prime’s introduction to San Leandro and Alameda County was short-lived and never more than a potential bargaining chip against Sutter’s wishes to purchase San Leandro Hospital and lease it the Alameda County Medical Center for acute rehabilitation services. The large contingent of hospital supporters, though, clamored for Prime’s offer to the consternation of some at the county-level. To be sure, Sutter bristled at the possibility of Prime encroaching on their territory with a new facilities sprouting in nearby Castro Valley.
 The fear among county officials was the belief Prime’s business model was not sustainable and could potentially bust the state’s health care system. Its introduction into a local hospital system is somewhat akin to a virus making its home in the host and quickly sapping it of its life.

Union leaders loathe Prime for its playbook of quickly ridding facilities of its employee contracts, while insurance companies routinely joust with it over claims. If it isn’t alleged plots to garner increased profits by overcharging Medicare, it gains increased income by funneling patients through its emergency rooms at a premium.

Its voracious appetite for money at the expense of health care has also had unintended consequences. When health insurance companies covering patients surrounding Prime’s latest pick-up in Reading protested, the insurer urged patients to use the competing community hospital. They followed the insurers lead and subsequently overran the hospital leading to state fines revolving around cleanliness.

The situation in San Leandro now appeared to be ripe for a similar brand of buyer’s remorse as other communities Prime opened shop. The Devil’s Advocate in many said Prime would have been better than no hospital at all, but often those in dire circumstances, make decisions only making it worse. San Leandro, with a large number of patients without health insurance could have been saddled with extremely exorbitant hospital bills for the slightest of afflictions due to Prime’s insistence to use the emergency room. Union causes would have been place in a battle over disputed contracts and the community would have been uttered the apropos, yet worn out yarn, “better the Devil you know than the Devil you don’t.”