Healthcare Business News

Controversy swirls around two Prime hospitals in California

By Beth Kutscher
Posted: June 6, 2014 - 6:00 pm ET

Two California state legislators are calling on Truven Health Analytics, which runs the Top 100 Hospitals recognition program, to rescind the honor from two more hospitals owned by Prime Healthcare Services.

Truven in February rescinded the 2012 and 2013 Top 100 designation from Prime's Desert Valley Hospital after it received a sanction last year from the California Department of Public Health.

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Yet in a letter last month to Truven President and CEO Mike Boswood, Dr. Ed Hernandez, chair of the California Senate Committee on Health, and Dr. Richard Pan, chair of the Assembly Committee on Health, said the recognition also should be stripped from two other Prime hospitals.

These hospitals, they wrote, include 74-bed Garden Grove (Calif.) Hospital and Medical Center, which was sanctioned by the health department in 2012 for administering a fatal overdose of a sedative to a patient. They also singled out 120-bed Shasta Regional Medical Center in Redding, Calif., for its “incredulous and well-documented practice” of billing Medicare for a protein malnutrition disorder known as Kwashiokor at 70 times the state average.

Given the sanctions, the letter added, Truven should also remove Prime from its 2013 list of Top 15 Health Systems. Prime was not included on the list this year.

“Prime Healthcare is proud of the clinical and operational excellence at Shasta Regional Medical Center and Garden Grove Hospital and Medical Center,” Edward Barrera, a spokesman for the Ontario, Calif.-based chain, said in an e-mail. “We respect Truven Health Analytics for its strict reliance on unbiased, peer-reviewed methodology to arrive at its results, and we believe an impartial assessment of Prime Healthcare will continue to show that it’s one of the top health systems in the nation.”

A spokesman for Truven declined to discuss the letter. “All 100 Top Hospitals, Top Health Systems and Top Cardiovascular Hospitals award winners are thoroughly reviewed prior to each study release,” he said. “All reviews are consistent with our revocation policies.”

Truven rescinded the honor from Desert Valley after it was slapped with a $50,000 fine for performing non-emergency cardiac catheterizations in a lab licensed only for diagnostic procedures.

One patient died and two others were harmed in the 2011 incidents, the health department found. Prime is appealing the sanction, which it described as the hospital’s first administrative penalty.

Over the past few years, the for-profit chain has embarked on an aggressive nationwide expansion plan. Its strategy of buying up struggling community hospitals and turning them around into award-winning facilities often evokes strong, contradictory feelings.

On the one hand, many of its hospitals were days away from shutting their doors—sometimes unable to even make it to the deal closing without financial assistance from Prime. The chain insists that its hospitals are high performers because they are held to high standards, and because it attempts to standardize effective processes across the group.

But Prime has been under fire for a number of allegations including upcoding and high rates of septicemia at its facilities. It also has taken competitor Kaiser Permanente to court for $100 million in unpaid reimbursement claims as well as what it describes as a conspiracy to keep it out of the market.

The Rhode Island Department of Health outlined this paradox in a decision last year that ultimately allowed Prime to take over Landmark Medical Center and the Rehabilitation Hospital of Rhode Island. If it didn’t allow Prime to assume ownership—after other suitors had already dropped out of the sales process—the hospital’s demise would cause “considerable adverse economic impact,” it wrote.

One of Prime’s most vocal critics is the Service Employees International Union. Prime contends that the SEIU has mounted a “smear campaign” with the ultimate aim of forcing it to allow its employees to unionize.

Barrera similarly contended that Hernandez and Pan are “surrogates for the SEIU-UHW.”

“The union has had a vicious anti-corporate smear campaign against Prime Healthcare for the past five years, and these two legislators are just doing the bidding of their political patrons,” he said. “It’s interesting to note that other Top 100 California hospitals received similar penalties but went unmentioned.”

Follow Beth Kutscher on Twitter: @MHbkutscher

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