One of the largest hospital systems in the nation and two of its doctors will pay $37.5 million to resolve violations of the False Claims Act and the California False Claims Act. The settlement — which resolved two cases — is a joint resolution with the US Department of Justice and the California Department of Justice. The United States and California entered into a settlement agreement with the Prime Healthcare Services system; Prime’s founder and Chief Executive Officer, Dr. Prem Reddy; and interventional cardiologist Dr. Siva Arunasalam to resolve alleged violations of the False Claims Act and the California 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 Foundation Inc., Prime Healthcare Management Inc., High Desert Heart Vascular Institute (HDHVI), and Desert Valley Hospital Inc. Under the settlement agreement, Arunasalam will pay $2 million. Reddy has already paid $1,775,000, and Prime has paid $33,725,000. The United States will receive $35,463,057 of the settlement proceeds, and California will receive $2,036,943.
