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California Company Pays $65 Million To Settle Medicare Fraud Claims


A California health care provider and its CEO have agreed to pay $65 million to settle claims made by the United States government that it defrauded Medicare by submitting false claims for services rendered to its patients.

Federal investigators say Prime Healthcare Services, Inc., several of its subsidiaries, and its chief executive officer Dr. Prem Reddy made a corporate practice of increasing inpatient admissions of Medicare patients who utilized the company’s 14 emergency departments throughout California. The company allegedly booked several patients from 2006 through 2013 into inpatient services to address complaints that could have been addressed effectively but less expensively on an outpatient basis.

In addition, the government alleges Prime of “up-coding” bills sent to Medicare as a matter of policy, leading Medicare to reimburse for more expensive services that were never given to the patients in question. They say this practice continued unabated from 2006 through 2014.

The charges were brought via the qui tam, or whistleblower, provision of the False Claims Act (FCA) (a/k/a, “Lincoln’s Law”), which allows whistleblowers to bring allegations to bring lawsuits against companies for alleged violations of the Act, as well as allowing the government to take over lawsuits after investigating the charges.

In addition to fines, Prime has agreed to participate in an organized compliance program as outlined in the Corporate Integrity Agreement with the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG). The compliance program is a five-year program that includes a requirement that Prime obtain regular independent reviews of claims it submits to Medicare.

The Law Offices of Bjorn Brunvand have been representing people charged with capital murder, felony drug charges, drunk driving, government fraud, and white-collar crimes for over a quarter century. Contact our office today to discuss your Tampa Bay-area state or federal charges.


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