SHERMAN OAKS—On Monday, July 19, the U.S. Department of Justice announced that one of the largest hospital systems in the nation and two of its doctors will pay $37.5 million to resolve violations of the California False Claims Act and the False Claims Act.
The United States and the state of California entered into a settlement agreement with the Prime Healthcare Services system; Chief Executive Officer, Dr. Prem Reddy; and interventional cardiologist Dr. Siva Arunasalam to resolve alleged violations of the False Claims Act based on kickbacks paid by Prime to Arunasalam for patient referrals.
Prime includes the Ontario-based Prime Healthcare Services Inc., Prime Healthcare Management Inc., Prime Healthcare Foundation Inc., High Desert Heart Vascular Institute (HDHVI), and Desert Valley Hospital Inc.
Under the settlement agreement, Arunasalam will pay $2 million. Prime has already paid $33,725,000 and Reddy has paid $1,775,000. The United States will receive $35,463,057 of the settlement proceeds, and the state of California will receive $2,036,943.
In 2018, Reddy and Prime paid $65 million to settle unrelated allegations of overbilling and false claims.
