Kaiser calls claim ‘deeply puzzling’
November 15, 2011 5:11 PM
Tomoya Shimura
Staff Writer

ONTARIO • Prime Healthcare Services, which owns Desert Valley Hospital, filed an antitrust lawsuit Tuesday alleging that a labor union and Kaiser Permanente have conspired to drive Prime hospitals out of Southern California.

“By this action, Prime seeks to stop the anticompetitive actions of defendants to eliminate the choice Prime offers to consumers and other purchasers of vital health care services in the market,” according to a complaint filed in the U.S. District Court for the Southern District of California.

The complaint alleges that the Service Employees International Union and Kaiser share a common goal and conspired — through their labor-management partnership — to protect their business models from the competition presented by Prime.

“We have only just received the lawsuit by Prime Healthcare, and find it deeply puzzling,” Kaiser said in a statement released Tuesday. “At first glance, Prime’s allegations appear to be that Kaiser Permanente’s 66-year-old model of integrating the delivery and financing of care, coupled with our nationally well-regarded Labor Management Partnership, are somehow conspiracies designed to illegally compete with Prime Healthcare.”

Prime’s complaint alleges that the SEIU sees the company as a threat to the union’s campaign to expand representation and raise wages, and so is trying to damage Prime by producing inaccurate reports and studies, working with the media to publicize baseless allegations.

The labor union has accused Prime hospitals of having unusually high number of patients diagnosed with conditions that result in higher reimbursements for hospitals. It’s also been actively trying to prevent Prime from buying Victor Valley Community Hospital, claiming that Prime’s management puts profits over patients.

SEIU-United Healthcare Workers West spokesman David Tokaji said in an email that the lawsuit is Prime’s tactic to hide the allegations and investigations against the group.

“Rather than file suit against health care workers who are blowing the whistle on Prime, the company ought to come clean, repay the public and patients, and fundamentally change its business model,” Tokaji said.

As for Kaiser, Prime is claiming that the rival medical group has withheld more than $100 million in reimbursements for care provided to Kaiser members at Prime hospitals.

Kaiser is already suing Prime, alleging that Prime and its hospitals “trap patients” and “submit false and inflated bills,” according to a court document.

“Prime is the subject of multiple allegations of wrongfully driving up costs in the hospitals it takes over, and providing inappropriate care,” the statement from Kaiser reads. “Kaiser Permanente’s case against Prime’s wrongful and fraudulent practices is already pending in Los Angeles Superior Court. It may be that Prime’s baseless lawsuit is an attempt to deflect some of those legal allegations.”

Tomoya Shimura may be reached at (760) 955-5368 or TShimura@VVDailyPress.com. Follow Tomoya on Facebook at facebook.com/ShimuraTomoya.

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