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Health & Welfare | Daily Report | Decoding Prime
February 6, 2013 | Lance Williams

The Prime Healthcare Services hospital chain has acknowledged it is the target of two federal investigations: a U.S. Justice Department probe of its Medicare billings and an inquiry into alleged violations of patient confidentiality laws.

The San Bernardino County-based company disclosed the investigations in a Jan. 2 filing with the state health department in Rhode Island, where Prime hopes to buy its 22nd hospital.

Prime’s filing marked the first time the company has said it is facing a federal investigation. Until now, the company has steadfastly denied being the subject of any such probes.

Prime claims its Medicare billings are legal and proper, and the company shows little sign of backing away from the kind of aggressive billing practices that have made it the focus of official scrutiny.

As California Watch has reported, Prime hospitals have billed Medicare for treating extremely high rates of some difficult medical conditions, including septicemia, or blood poisoning, and kwashiorkor, a form of malnutrition seen among children in African famines. The billings have made Prime eligible for millions of dollars in Medicare bonus payments, according to federal records.

In June, the Justice Department subpoenaed documents concerning Prime’s billings for septicemia and malnutrition, the company said in the Rhode Island filing.

In a letter in response to California Watch’s request for comment, Prime lawyer Anthony Glassman said the company had been targeted for federal investigation because of “false allegations” made by the Service Employees International Union, which represents many Prime workers and has butted heads with the company over labor contracts.

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