California’s Prime Healthcare to Pay $65 Million to Settle Medicare Fraud Lawsuit

Prime Healthcare Services will pay $65 million to settle a federal whistleblower lawsuit that accused the fast-growing California hospital chain of engineering a wide-ranging Medicare fraud scheme.

The settlement, announced Friday by federal prosecutors in Los Angeles, requires Dr. Prem Reddy, Prime’s founder and the alleged architect of a scheme to pump up its Medicare billings, to pay $3.25 million of the settlement out of his own pocket.

Prime also must abide by a five-year “corporate integrity agreement” that requires the company to hire independent consultants to verify its Medicare billings, records show. (read more)