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Prime Healthcare Services, one of the nation’s largest hospital systems, agreed Friday to pay $65 million to settle allegations of Medicare overbilling in California. The company and CEO Prem Reddy agreed to settle a whistleblower lawsuit alleging that 14 of its hospitals unnecessarily admitted patients and also “upcoded” patient diagnoses, exaggerating their illnesses in order to receive more Medicare money. (8/3)

Prime Healthcare Services Inc. will pay the bulk of the settlement, while Chief Executive Prem Reddy will pay $3.25 million and the system’s nonprofit affiliate will pay an undisclosed small amount, according to the Justice Department and a Prime spokeswoman. Ontario, Calif.-based Prime also agreed to a five-year corporate integrity agreement with the U.S. Health and Human Service Department’s inspector general. The agreement requires Prime to have an “independent review organization” scrutinize its Medicare bills. Under the terms, the settlement resolves allegations against Prime and its nonprofit affiliate Prime Healthcare Foundation without a determination of liability. (Evans, 8/3)