Press Releases

Honda, Lofgren lead California Lawmakers in urging CA Attorney General to reject hospital sale to Prime Healthcare Services

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Washington, December 11, 2014 | Contact: Peter Whippy (202-225-3072) | comments
WASHINGTON, DC – Eighteen California Lawmakers urged California Attorney General Kamala Harris today to reject the sale of six hospitals in the Daughters of Charity Health System to Prime Healthcare Services, a controversial for-profit system that has a history of unfair business practices.

The letter, led by U.S. Reps. Mike Honda (D- San Jose) and Zoe Lofgren (D- San Jose), and signed by eighteen California Members of Congress, cites serious concerns that “under Prime, patient care and healthcare worker rights will suffer at these hospitals.”

The letter goes on to note that Prime’s history of unfair business practices “have resulted in civil and criminal investigations by government agencies for allegedly overbilling Medicare as well as violations of patient confidentiality.” Furthermore, California’s need for additional safety net hospitals as a result of the expanded Medi-Cal services provided under the Affordable Care Act “is incompatible with Prime’s business model of minimizing the amount of care it delivers to low-income patients.”

Prime Healthcare Services has a long and troubling history of cutting services, raising prices, and laying off workers. The questionable history of Prime Healthcare combined with the mission of these hospitals to serve the most-needy residents raises substantial doubts as to the sensibility of this sale.

California Attorney General Kamala Harris may reject the sale based on any factors found relevant, including: whether the sale is in the public interest; whether it would create significant effects on the availability of health care services in the community; or whether the proposed use of the proceeds from the transaction is consistent with the charitable trust under which the hospitals have operated.

Reps. Honda and Lofgren were joined by Representatives Sam Farr (D- Carmel), Mark Takano (D- Riverside), Janice Hahn (D- San Pedro), Anna G. Eshoo (D- Palo Alto), Lucille Roybal-Allard (D- Los Angeles), Xavier Becerra (Los Angeles), Doris O. Matsui (D- Sacramento), Tony Cardenas (D- San Fernando Valley), Jackie Speier (D- San Francisco/San Mateo Counties), Barbara Lee (D- Oakland), Loretta Sanchez (D- Garden Grove), Juan Vargas (D- San Diego) Mike Thompson (D- St. Helena), George Miller (D- Martinez), Alan Lowenthal (D- Long Beach), and Maxine Waters (D- Los Angeles).

Full text of the letter is below:

December 11, 2014


The Honorable Kamala D. Harris
Attorney General, California Department of Justice
Office of the Attorney General
1300 I Street
Sacramento, CA 95814

Dear Attorney General Harris:

We the undersigned members of the California Democratic Congressional Delegation respectfully urge the Office of the Attorney General to reject the sale of six hospitals in the Daughters of Charity Health System to Prime Healthcare Services. With six hospitals throughout California, all of our constituents have a public health and cost-shift stake in what happens with this proposed acquisition. It is our belief that under Prime, patient care and healthcare worker rights will suffer at these hospitals.

Our biggest concern is Prime's history of unfair business practices that have resulted in civil and criminal investigations by government agencies for allegedly overbilling Medicare as well as violations of patient confidentiality. The National Labor Relations Board has issued charges against Prime for such illegal practices as unilaterally cutting employee health insurance plans, interrogating and intimidating employees who are supportive of their union, bad faith bargaining and bribing employees to vote to decertify the union. Class action and wage and hour violation lawsuits have been filed against Prime at 11 of their 15 California hospitals.

We would also note that California today needs more safety net hospitals than ever, given that over 2 million Californians have signed up for expanded Medi-Cal under the Affordable Care Act. This growing Medi-Cal need is incompatible with Prime’s business model of minimizing the amount of care it delivers to low-income patients.

In closing, we do not believe an acquisition of Daughters of Charity hospitals by Prime is in the best interests of patients or healthcare workers in California. Given Prime's troubled past and regulatory problems, and its incompatibility with the historic safety net mission of Daughters, we urge you to protect the rights of patients and healthcare workers by rejecting this proposed sale.

Sincerely,

U.S. Representatives Mike Honda, Zoe Lofgren, Sam Farr, Mark Takano, Janice Hahn, Anna G. Eshoo, Lucille Roybal-Allard, Xavier Becerra, Doris O. Matsui, Tony Cardenas, Jackie Speier, Barbara Lee, Loretta Sanchez, Juan Vargas, Mike Thompson, George Miller, Alan Lowenthal, and Maxine Waters.

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