Board Dossier
Chairman President and CEO, Prime Healthcare Services · FAH Director
Critical| Role | FAH Director, former Chair (2021) |
| Organization | Prime Healthcare Services (private) |
| Hospitals | 51 hospitals, 14 states |
| Employees | 45,000+ |
| Estimated Revenue | $7–8B |
| Ownership | Privately held, founder-controlled |
| Threat Level | Critical |
Prime Healthcare Services operates 51 hospitals across 14 states with approximately 45,000 employees and estimated revenue of $7–8 billion. The company is privately held with Dr. Prem Reddy as sole controlling shareholder. His daughter Dr. Kavitha Bhatia serves as President and Chair of the Prime Healthcare Foundation. S&P Global upgraded Prime to a ‘B’ rating in late 2025, citing improved financial stability. Reddy has served on the FAH board since at least 2017 and served as Chair in 2021.
Prem Reddy’s California medical license was revoked effective May 23, 2003, following an administrative hearing by the California Medical Board.
Source: California Medical Board disciplinary records (mbc.ca.gov)
| Year | Amount | Key Allegations | Reddy Personal Payment |
|---|---|---|---|
| 2018 | $65M | Medically unnecessary admissions and upcoding, 14 California hospitals | $3.25M |
| 2019 | $1.25M | Upcoding and unnecessary admissions, two Pennsylvania hospitals | Included in total |
Involved 14 California hospitals including Alvarado Hospital Medical Center and Centinela Hospital Medical Center. DOJ alleged a “corporate-driven scheme” to increase inpatient admissions from Emergency Departments regardless of medical necessity.
DOJ source: justice.gov — Prime Healthcare $65M settlement
In March 2025, Prime completed the $375 million acquisition of eight Illinois hospitals from Ascension. Within two months, Prime implemented significant service reductions.
| Hospital | Location | Service | Action |
|---|---|---|---|
| Ascension Saint Joseph | Joliet | Pediatric Services | Terminated |
| Ascension Mercy | Aurora | Level II Trauma | Designation Withdrawn |
| Ascension Saint Mary | Kankakee | Obstetric/Maternal Care | Terminated |
On May 20, 2025, Senators Dick Durbin and Tammy Duckworth sent a formal letter questioning Prime’s commitment to “not make any material reductions” to services for at least 24 months — a promise made during the acquisition process. The Illinois Department of Public Health and State Attorney General are monitoring.
Source: Senator Durbin press release, May 20, 2025 (durbin.senate.gov)
In 2010, analysis of CMS data revealed six Prime hospitals ranked in the 99th percentile of U.S. hospitals for sepsis diagnosis. This led to a DOJ subpoena in 2012 and multiple state-level investigations into potential upcoding of standard infections to more lucrative sepsis diagnoses.
Prime’s playbook: acquire distressed facilities, cancel existing insurance contracts to demand higher reimbursement rates, implement cost reductions. Multiple acquisitions blocked or conditioned by the California Attorney General.
Over 150 Healthgrades clinical quality awards in 2025. Twelve Prime hospitals named to Forbes 2026 Top Hospitals list. CMS Star Ratings vary across 51-hospital system.
Prime Healthcare PAC contributed over $544,000 in the 2024 cycle.