Kaiser Permanente is being sued in four Southern California counties by a company seeking more than $25 million in connection with payment for emergency services provided to Kaiser health maintenance organization patients.
Prime Healthcare Services, a for-profit chain of hospitals based in Chino, said Wednesday that eight of its hospitals filed suits in state courts Jan. 23 against Oakland-based Kaiser for its failure to reimburse them for emergency services provided to Kaiser members.
Prime Healthcare also said that doctors in Kaiser's Emergency Provider Response Program, staffed by the Southern California Permanente Medical Group, pressure providers at hospitals that do not contract with Kaiser to declare a patient "stable" so that the patient might be transferred back more quickly under Kaiser's care.
Since 2001 more than 17 hospitals throughout Southern California have closed due to financial constraints and several others were forced to file bankruptcy.In contrast to financially distressed hospitals, Kaiser reported profits of $1.3 Billion in 2006 and $2.5 Billion in 2007. This is not surprising given that although insurance premiums have increased; the amount of revenue spent on patient care has remained the same or decreased.
According to Dr. Prem Reddy, a board certified Cardiologist and Chairman of Prime Healthcare Services, "HMOs, including Kaiser, ought to be focused on effectively managing patients' care; but unfortunately, they are focused on managing bills". Kaiser's profits are even greater than other for-profit HMOs because it is not required to pay taxes on a single penny of its earnings as it enjoys the status of being a non-profit entity. The only real difference between Kaiser and other for-profit health plans is that Kaiser is not required to pay taxes.
Even though Kaiser is a non-profit entity, it provides very little, if any, charity care at the hospitals it owns and the emergency departments in these hospitals see very few Medi-Cal patients and uninsured patients. In contrast to Kaiser's hospitals, Prime Healthcare's hospitals consistently provide millions of dollars in charity care every year which, in almost all cases, exceed the amount of charity care provided by other neighbor hospitals including non-profits. Prime Healthcare believes that many other community hospitals are similarly concerned with this dilemma as to how to deal with this proverbial 800-pound gorilla that endangers their survival