Hospital system pays $65M to settle Medicare billing claims

August 03, 2018 - 8:10 pm

LOS ANGELES (AP) — One of the nation's largest hospital systems has agreed to pay $65 million to settle allegations of Medicare overbilling in California.

Prime Healthcare Services and its CEO agreed Friday to settle whistleblower allegations that 14 of its hospitals unnecessarily admitted patients and billed the government for treatment they didn't need.

The U. S. attorney's office says hospitals generally receive higher payments from Medicare when a patient is admitted rather than placed under observation.

In a statement, Ontario, California-based Prime Healthcare says the government didn't find any wrongdoing by the company. Prime says physicians, not hospitals, "direct the level of care needed for their patients" and the company supports those decisions.

Under the settlement, Prime's founder and CEO Prem Reddy will pay $3.25 million. The company will pay $61.75 million.

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