State sues Prime Healthcare over HMO billing

Latest example by Prime is recent collection notices to upwards of 6,000 Southern California Kaiser members

SACRAMENTO — The Department of Managed Health Care is suing to stop Victorville-based Prime Healthcare Services from violating the law by balance billing HMO patients for services received at its hospitals, the state announced.

The suit filed in Orange County Superior Court seeks a court order prohibiting Prime from balance billing practices, and penalties of $2,500 for each violation.

In recent years, Prime has billed thousands of emergency room patients for amounts that it claims it is owed by health plans, using a debt collection agency to threaten the credit ratings of HMO patients.

Dr. Prem Reddy is chairman of Prime Healthcare Management. Prime Healthcare officials called the suit “frivolous” and said they were disappointed that the state “has resorted to punitive actions against the very providers, physicians and hospitals alike, that are essential to maintaining the health care safety net.”