Our Point of View

July 2 2008

California Department of Managed Health Care Sues Prime Health Over Bills to Kaiser Permanente Members

The California Department of Managed Health Care announced the filing of a lawsuit against Prime Health over Prime's efforts to bill Kaiser Permanente members for care received at Prime hospitals.

"Prime Healthcare's ongoing practice of putting consumers in the middle of billing disputes between providers and health plans is the largest example of this egregious practice we've seen to date and it must be stopped," said DMHC Director Cindy Ehnes.

In June, the judge in Kaiser Permanente's lawsuits against Prime made permanent his restrictions preventing Prime from collecting amounts due directly from Kaiser Permanente members. In his signed order, the judge stated:

"In what seems a clearly abusive litigation tactic, on or about May 1, 2008, Prime sent a bill and a collection agency demand letter to thousands of Kaiser Members.

"Prime's bills and collection letter are both an unfair and sharp practice and "fraudulent" in the sense that the public is likely to be misled.

"The impact of these dunning collection letters on the members who received them, and the public interest in preventing this kind of "in terrorem tactic," cannot be overstated...."