Prime Healthcare Systems settles insurance fraud allegations for $1M

Steve Tawa
February 15, 2019 - 11:46 am
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Steve Tawa/KYW Newsradio


PHILADELPHIA (KYW Newsradio) — One of the largest hospital groups in the nation that runs two local hospitals has agreed to pay more than $1 million to settle allegations that it submitted false claims to Medicare. 

Prime Healthcare Systems allegedly submitted the false claims after admitting emergency room Medicare patients to the hospital for medically unneccessary overnight stays, yet they required less costly, outpatient care.

The company that runs Roxborough Memorial Hospital in Philadelphia and Lower Bucks Hospital in Bristol, and the parent company's CEO, have settled a lawsuit filed by a worker at Roxborough, under the whistleblower provisions of the False Claims Act.

U.S. Attorney Bill McSwain alleges they also billed for patient diagnoses more expensive than the patients had so they could increase Medicare payments. The feds call it "upcoding." 

The hospital management company and its CEO, Dr. Perm Reddy, paid $65 million from a similar lawsuit — settling the same storyline — Medicare fraud allegations out of 14 Prime hospitals in California in 2018.

Prime operates 45 hospitals in 14 states. It acquired the local hospitals in 2012.