Prime Healthcare Services and Kaiser Foundation Health Plan have taken a step back from their ongoing legal feuds and agreed to dismiss lawsuits against each other and go to binding arbitration.
They also agreed to undisclosed payment rates when Kaiser Permanente members are treated at Prime Healthcare hospitals, according to Kaiser.
The lawsuits alleged breach of contract and unfair competition, among other charges. Some of the lawsuits have been pending in Los Angeles Superior Court since 2008, according to a Kaiser Permanente release. The two companies have agreed to resolve their issues through confidential and binding arbitration, according to Kaiser.
A spokeswoman for Kaiser declined to comment further on the agreements Tuesday. A Prime spokesman also declined to comment beyond a statement announcing the agreement.
In at least one of the lawsuits, Prime said Kaiser owed it $100 million in unpaid medical claims and accused Kaiser of conspiring with the Service Employees International Union to keep it out of the market. A judge dismissed that suit, but Prime has been appealing.
In a somewhat strange twist in their relationship, Kaiser also announced Monday that it has not agreed to support Prime's acquisition of the Daughters of Charity hospitals, contrary to statements Prime President and founder Prem Reddy made to California newspaper the Gilroy Dispatch.
The newspaper reported Monday that Reddy said in an interview Kaiser had agreed to support the acquisition. But Kaiser, in a statement, denied that it had extended its support.
“Contrary to erroneous media reports and erroneous statements by Prime, Kaiser Permanente has not agreed to support Prime's acquisition of the Daughters of Charity hospitals and has not sent a letter of support to the attorney general,” according to the statements.
Prime followed up with its own statement Tuesday seeking to correct its “prior misstatement.”
“Earlier today, in an interview with certain media outlets, Prime Healthcare stated that Kaiser Permanente had agreed to support Prime Healthcare's bid to purchase several Daughters of Charity hospitals. This was not an accurate statement of the agreement reached between the parties,” according to the Prime statement. “Prime wishes to now make clear that Kaiser Permanente agreed only to advise the Attorney General's Office that it has entered into a Hospital Services Agreement with Prime Healthcare that is designed to address, on a going forward basis, concerns raised by Kaiser Permanente in its December letter to the Attorney General.”
Prime's proposed takeover of the hospitals is now before California Attorney General Kamala Harris. A number of elected California officials and the Service Employees International Union-United Healthcare Workers West have been asking Harris to turn down the deal. The union alleges that Prime has overbilled Medicare and Medi-Cal (California's Medicaid program), inappropriately admitted patients through its emergency departments and canceled contracts with insurers, which can lead to steep out-of-network emergency department charges.
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