The powerful Service Employees International Union is urging the attorney general of New Jersey to force the sale of five Prime Healthcare Services' hospitals in response to a federal lawsuit against the hospital chain alleging it fraudulently billed Medicare beneficiaries.
SEIU-United Healthcare Workers West sent a letter Thursday to New Jersey Attorney General Christopher Porrino calling on him to use his authority to force the resale of Prime's five hospitals in the state in order to protect “their charitable assets and protect the quality and accessibility” of services as the system faces a lawsuit that could potentially affect its Medicare participation, according to a news release.
The U.S. Justice Department joined a lawsuit in May that claims Prime Healthcare, which owns 43 hospitals in 14 states, billed Medicare for patients admitted as inpatients when they should have been outpatients placed on “observation” status.
If Prime Healthcare is found to have violated the law, it could be barred from receiving Medicare funding, dealing a “serious financial blow to the company and compromise its ability to provide care at the New Jersey hospitals,” SEIU-UHW said.
In a prepared statement, Prime spokesman Fred Ortega said, “This letter is simply the latest attempt by SEIU-UHW to publicly smear Prime Healthcare as part of its ongoing corporate campaign to extract bargaining concessions from Prime hospitals.”
SEIU-UHW is currently in the midst of a labor dispute with Prime Healthcare that involves 1,300 California employees.
Ortega also denied the lawsuit's allegations and said Prime "remains committed to providing quality care that patients need and deserve. We are confident that we will prevail and be found to have completely complied with all federal regulations regarding Medicare inpatient admissions."
Porrino can force a Prime hospital's resale for up to five years after it was purchased by the for-profit provider if his office discovers “material misrepresentation” or any event that impairs Prime Healthcare from operating the hospitals, SEIU-UHW President Dave Regan wrote in the letter.
The attorney general's office declined to comment on the letter.
The five New Jersey hospitals were purchased by Ontario, Calif.-based Prime Healthcare in the last two years. The hospitals are St. Mary's General Hospital in Passaic; St. Michael's Medical Center in Newark; and three hospitals in Dover, Denville and Boonton that are part of St. Clare's Health System.
SEIU-UHW has taken issue with Prime Healthcare in the past. Last year, the union was involved in a campaign to block the sale of Daughters of Charity Health System to Prime. The union succeeded, and Prime Healthcare walked away from the $843 million deal after California Attorney General Kamala Harris imposed more than 300 conditions in order for the deal to go through.