Hospital chain Prime Healthcare Services, while not admitting any wrongdoing, has agreed to pay $275,000 to settle a federal investigation into alleged violation of patient privacy. Prime Healthcare has 20,000 employees and owns or operates 23 acute care hospitals in California, Kansas, Nevada, Pennsylvania and Texas.
Officials at one of its facilities, Shasta Regional Medical Center in California, were accused of sharing a woman's medical records with two news outlets and sending an email about her treatment to nearly 800 hospital employees.
They were attempting to respond to allegations by news outlet California Watch that the facility billed Medicare for treating patient Darlene Courtois with Kwashiorkor, a severe form of malnutrition that provides greater reimbursement. Courtois told California Watch that she wasn't treated for malnutrition and is overweight. The hospital execs argued that the woman had waived her right to privacy by releasing some of her own records to journalists.
Last year, the state fined the hospital chain $95,000 in the incident, which the organization is appealing, according to the Los Angeles Times. In a statement, the organization cited the expense of fighting the federal investigation, but added that it believes it "would have prevailed in this matter based upon the merits."
California Watch reported that the facility was billing for Kwashiorkor at up to 70 times the state average, then halted the practice once its reporters focused on its billing practices.
It also said it expects to prevail against allegations of upcoding, calling both matters part of a vicious "corporate campaign" by local labor unions. Prime told the Times it has responded to a federal subpoena pertaining to the coding and believes its "practices have been consistent with all applicable laws."
The Office of Inspector General, in its 2013 work plan, said it would increase scrutiny of hospital billing practices, not only to check for fraud, but also whether they comply with Medicare rules.