The Wall Street Journal: Prime Healthcare CEO faces lawsuit over patient admissions

Over the past decade and a half, California cardiologist Prem Reddy has built Prime Healthcare Service Inc. into one of the largest for-profit hospital chains in the U.S. by targeting distressed hospitals for acquisition. He boasts that his aggressive turnaround strategies have righted the finances of each and every one.

But the chief executive has also attracted criticism, including claims that he plays hardball with insurers. Now Reddy is the central figure in a lawsuit brought by an employee and the Justice Department alleging that he strong-arms doctors in an effort to unnecessarily hospitalize patients at Medicare’s expense.

The tension is increasing scrutiny of one of the hospital sector’s most unconventional and ambitious CEOs, who is known for his rapid-fire acquisitions.

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