Law­suit ac­cuses Kaiser, SEIU of an­titrust vi­o­la­tions

Modern Healthcare - - NEWS - Vince Gal­loro

Prime sues Kaiser, SEIU, claim­ing an­titrust vi­o­la­tions

Prime Health­care Ser­vices has long re­sponded to the Ser­vice Em­ploy­ees In­ter­na­tional Union in much stronger and more pub­lic ways than its fel­low hos­pi­tal op­er­a­tors in Cal­i­for­nia. The hos­pi­tal chain now has moved the feud to fed­eral court, fil­ing an an­titrust law­suit al­leg­ing that the union and Kaiser Per­ma­nente have col­luded to re­strain trade in the mar­kets for emer­gency and other acute-care ser­vices and for health­care la­bor in four Cal­i­for­nia coun­ties, ac­cord­ing to the law­suit.

The 60-page com­plaint lays out On­tario, Calif.-based Prime’s charges that the SEIU has a strat­egy of “mar­ket dom­i­na­tion,” in which it seeks to en­sure that most of the com­pa­nies in a ser­vice sec­tor are un­der its con­tracts in or­der to re­move com­pet­i­tive pres­sures that keep wages and ben­e­fits down. In the Cal­i­for­nia hos­pi­tal mar­ket, ac­cord­ing to the law­suit, the SEIU first union­ized Kaiser’s Cal­i­for­nia hos­pi­tals in the early 1990s and then cam­paigned to or­ga­nize work­ers at Kaiser com­peti­tors such as HCA, Tenet Health­care Corp. and Catholic Health­care West, reel­ing in con­tracts with all of them over time.

Be­cause Prime re­fused to play along, the law­suit al­leges, start­ing in 2010 Oak­land, Calif.-based Kaiser and the SEIU con­spired to ei­ther force Prime to ad­just its busi­ness prac­tices, in­clud­ing its la­bor re­la­tions, or to go out of busi­ness. Kaiser and Prime have more than $100 mil­lion in un­paid claims for Kaiser health plan mem­bers at is­sue in a state law­suit filed in Los An­ge­les County Su­pe­rior Court, ac­cord­ing to the fed­eral law­suit.

In a state­ment, Kaiser sug­gested that Prime’s “deeply puz­zling” fed­eral law­suit is an at­tempt to de­flect at­ten­tion from that state court case deal­ing with “Prime’s wrong­ful and fraud­u­lent prac­tices.” Prime’s al­le­ga­tions sug­gest that Kaiser’s in­te­grated de­liv­ery and fi­nanc­ing model and its la­bor part­ner­ship, both na­tion­ally rec­og­nized, are some­how a con­spir­acy against Prime, ac­cord­ing to the state­ment.

In 2010, ac­cord­ing to Prime’s law­suit, the SEIU be­gan mis­lead­ing pub­lic cam­paigns, al­leg­ing that its analy­ses of Medi­care data show that Prime ei­ther has poor in­fec­tion­pre­ven­tion and mal­nu­tri­tion pro­ce­dures or is up­cod­ing charges to boost its fi­nan­cial re­sults. Prime al­leges in the law­suit that this cam­paign is de­signed to pun­ish Prime for its re­fusal to make a com­pa­ny­wide la­bor agree­ment with the SEIU.

The Cal­i­for­nia arm of the union, SEIUUnited Health­care Work­ers West, stands by its al­le­ga­tions that Prime’s hos­pi­tals are ei­ther un­safe or com­mit­ting cod­ing fraud, ac­cord­ing to a state­ment. “Rather than file suit against health­care work­ers who are blow­ing the whis­tle on Prime,” the state­ment reads in part, “the com­pany ought to come clean, re­pay the pub­lic and pa­tients, and fun­da­men­tally change its busi­ness model.”

Prime also al­leges in the law­suit that the Kaiser-seiu part­ner­ship vi­o­lates la­bor laws be­cause pay­ments from Kaiser to the part­ner­ship’s trust even­tu­ally pass to mem­ber la­bor unions.

Prime seeks in­junc­tions forc­ing Kaiser and the SEIU to stop the be­hav­ior de­scribed in the law­suit and a trial to de­ter­mine ac­tual dam­ages, which would be tre­bled if Kaiser and the SEIU were found to have vi­o­lated an­titrust laws, ac­cord­ing to the law­suit.

Prime filed the law­suit in U.S. District Court in San Diego. The court as­signed the case to Judge M. James Lorenz, who coin­ci­den­tally presided over the fed­eral govern­ment’s two un­suc­cess­ful at­tempts to pros­e­cute Dal­las­based Tenet, Al­varado Hos­pi­tal Med­i­cal Cen­ter, San Diego, and Al­varado’s CEO on crim­i­nal anti-kick­back charges (May 1, 2006, p. 14).

Tenet sold Al­varado to a physi­cianowned com­pany in 2007 as part of a set­tle­ment of the charges in the case. Prime bought the hos­pi­tal in Novem­ber 2010, even af­ter, Prime al­leges in the law­suit, the SEIU tried to in­ter­cede with reg­u­la­tors to halt the sale.

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