Kitchen opposes Roxborough hospital buyer

Pennsylvania State Sen. Shirley M. Kitchen (D., Philadelphia) lashed out at the new owner of Roxborough Memorial Hospital in a letter to the director of the Pennsylvania Department of Health, urging Eli Avila to help stop Prime Healthcare Services from taking over the 140-bed facility.

Based in Ontario, Calif., Prime Healthcare is reportedly under investigation by federal authorities over aggressive Medicare reimbursement requests, though a company spokesman denies such reports.

"We deserve better than Prime in Roxborough and across Pennsylvania," Kitchen wrote in the March 26 letter, a copy of which was obtained by The Inquirer.

Kitchen's efforts in regard to the hospital in her district appear to be too late.

After The Inquirer faxed a copy of Kitchen's letter to Prime Healthcare spokesman Edward Barrera to seek comment, Peter Adamo contacted The Inquirer to say that he is the new chief executive officer and that he started work Monday.

Adamo said former chief executive Robert G. Souaid was no longer with the hospital.

"The previous owners were struggling; otherwise we would not be here," said Adamo, who grew up in Willingboro. His most recent post was at a Prime Healthcare facility in San Diego. "We're going to take a viable and needed facility and do what we can to keep it alive. If it had stayed on the course it was, they would not have made payroll in the coming weeks."

Prime Healthcare announced Feb. 22 that it had bought Roxborough from Solis Healthcare L.L.C. without specifying a price. Prime Healthcare began in 2001 and owns or manages 15 hospitals, most in California. Its chairman and founder, Prem Reddy, is a cardiologist.

Prime Healthcare tried to buy Christ Hospital in Jersey City, but withdrew last month when community leaders resisted. The company often seeks to buy financially troubled hospitals, drops unprofitable segments, and tries to boost revenue.

The Inquirer reported in February that Prime had net income of $54.65 million on operating revenue of $830.62 million in the six months that ended June 30 and that the most recent public financial data on Roxborough showed that the hospital had an operating loss in fiscal 2010.

Adamo said the company has committed $12 million to upgrade the hospital. He said it had been 10 years since the housekeeping staff got new floor-cleaning machines, so $50,000 was spent on those.

Adamo said fewer security guards will be needed to walk people to distant corners of the parking lot because lighting will be improved. He said that several million in cost savings could be found, but that the hospital might hire more nurses to improve the ratio to patients.

Adamo wrote back to Kitchen, providing a copy to The Inquirer, telling her that her assertions were "misleading and/or false." He noted that Prime was named one of the top 15 health systems in the country by Thomson Reuters.

A spokeswoman for the state Health Department declined comment.

Prime Healthcare has lawsuits pending with Kaiser Permanente and other insurers. It also has fought for years with the Service Employees International Union over union representation.

Meanwhile, Prime is accused of charging Medicare for unusually high numbers of patients with diseases rarely seen at those levels in America. For example, Kwashiorkor is a rare form of severe malnutrition often seen in the poorest parts of Africa, but not as much in California. Some of those ailments can mean higher Medicare reimbursement.

Barrera, the Prime Healthcare spokesman, denied that the company has done anything wrong and said suggestions it was under federal investigation were unfounded.

California Watch won a prestigious George Polk Award in February for its investigative stories about Prime Healthcare's billing practices. Editorial director Mark Katches said former Prime Healthcare officials and patients told the news organization they were contacted by the FBI.

Spokesmen for the FBI and the Office of Inspector General at the Department of Health and Human Services, which administers Medicare and Medicaid, both said their agencies do not comment on whether investigations are under way.

Contact David Sell at 215-854-4506 or dsell@phillynews.com, or follow on Twitter @PhillyPharma. Read his PhillyPharma blog on philly.com.