Prime Healthcare announced that it has resolved a civil qui tam (whistleblower) lawsuit by the U.S. Department of Justice (DOJ) concerning Medicare inpatient admissions from January 2006 through September 2013 involving 14 of Prime Healthcare's California hospitals.

The lawsuit also involved certain claims related to coding by a whistleblower. However, after extensive review, the government did not find merit in these claims and declined to intervene.

This settlement resolves all claims raised in the matter. There was no finding of improper conduct or wrongdoing of any kind by Prime Healthcare. Prime Healthcare's exemplary record of clinical quality care was never in question. This matter dealt with the technical classification of the category under which patients were admitted and billed.

Physicians, not hospitals, direct the level of care needed for their patients. Prime continues to support physicians in the care they determine is best. Prime Healthcare hospitals, employees and clinicians are nationally recognized for providing clinically excellent care.

Prime is committed to defending the rights of patients to receive high-quality care, and it has always supported the clinical decision making of physicians acting in the best interests of their patients. Prime Healthcare's Founder, Chairman, President, and CEO, Prem Reddy, M.D. stands with Prime Healthcare in support of this settlement and personally participated. Lawsuits related to inpatient admissions have become increasingly common among hospitals and health systems nationally.

In 2016, the American Hospital Association (AHA) and the California Hospital Association (CHA) filed briefs in support of Prime Healthcare, stating the government's regulation of hospital admissions inappropriately challenged the clinical decisions of physicians. These briefs by the two large hospital associations in the country called for reform of the government's standards related to inpatient admissions versus outpatient observation status.