Prime Healthcare Files Antitrust Lawsuit Against Kaiser, SEIU

November 16, 2011
Prime Healthcare Files Antitrust Lawsuit Against Kaiser, SEIU
California Healthline

On Tuesday, Prime Healthcare Services filed a lawsuit alleging that Kaiser Permanente and the Service Employees International Union have violated the Sherman Antitrust Act by colluding to drive Prime out of the Southern California marketplace, the Inland Valley Daily Bulletin reports (Edwards, Inland Valley Daily Bulletin, 11/15).

The lawsuit was filed in federal court in San Diego and names Kaiser Foundation Health Plan and its subsidiaries, and SEIU-United Healthcare Workers West as defendants (De Atley, Riverside Press-Enterprise, 11/15).

Background

The lawsuit is the latest in a series of allegations between the parties (Inland Valley Daily Bulletin, 11/15).

Kaiser previously has sued Prime, claiming that Prime facilities "trap patients" and "submit false and inflated bills" (Shimura, Victorville Daily Press, 11/15).

Details of Prime's Lawsuit

Prime's lawsuit alleges that SEIU, in exchange for wage concessions, has aided Kaiser's efforts to diminish Prime's market viability.

According to Prime, SEIU promoted false media stories about problems at its hospitals, including reports of high rates of blood infections. The lawsuit says SEIU also campaigned against the health system's efforts to acquire Victorville-based Victor Valley Community Hospital (Inland Valley Daily Bulletin, 11/15).

In addition, Prime's lawsuit claims Kaiser has withheld more than $100 million in reimbursements for care delivered to Kaiser members who received treatment at Prime facilities (Victorville Daily Press, 11/15).

The lawsuit is seeking injunctive relief to prevent activities that Prime alleges SEIU and Kaiser participated in, including disrupting Prime's business and "coercing or threatening patients" not to seek care at Prime hospitals. The lawsuit also seeks unspecified monetary damages (Inland Valley Daily Bulletin, 11/15).

Prime Implicates Lawmaker, News Organization

Meanwhile, Prime alleges that a "California State Legislator" who urged officials to look into high blood infection and malnutrition rates at its facilities had a "financial interest" in Kaiser and SEIU. The lawmaker implicated is Sen. Ed Hernandez (D-West Covina), the Pasadena Star-News reports. Rob Charles, a spokesperson for Hernandez, dismissed any suggestion that Hernandez helped facilitate a "conspiracy" between Kaiser and SEIU.

Prime also alleges that the news organization California Watch has served as a publicity arm of SEIU and published stories unfavorable to Prime (Luciano-Adams, Pasadena Star-News, 11/15). Mark Katches, editorial director of California Watch, said the organization has operated independently and has used state data and court documents to produce "a series of revelatory and groundbreaking stories" about Prime (Jewett, California Watch, 11/16).

Kaiser, SEIU Respond

Kaiser responded in a statement by saying it found the lawsuit "deeply puzzling."

Kaiser said, "At first glance, Prime's allegations appear to be that Kaiser Permanente's model of ... care, coupled with our ... labor management partnership, are somehow conspiracies designed to illegally compete with Prime Healthcare" (Victorville Daily Press, 11/15).

SEIU in a statement called Prime's lawsuit "frivolous" (Inland Valley Daily Bulletin, 11/15). David Tokaji, an SEIU-UHW spokesperson, added that the lawsuit is an attempt by Prime to deflect attention from allegations and investigations against the system (Victorville Daily Press, 11/15).