CtW Investment Group Calls on Medical Properties Board To Address Medicare Billing Practices at REIT's Largest Tenant
WASHINGTON, May 10, 2011 /PRNewswire/ -- In the wake of Sunday's California Watch report concerning state investigations into potential improper Medicare billing practices at Prime Healthcare Services, the CtW Investment Group sent a letter to the independent directors on the board of Medical Properties Trust (NYSE: MPW), calling on them to step forward at the REIT's May 19 annual meeting to address potential risks from the intensifying scrutiny of patient care and billing practices at Prime, Medical Properties' largest tenant. CtW had raised concerns regarding billing practices at Prime to the Medical Properties Trust board as far back as February 2010. William Patterson, Executive Director of the CtW Investment Group, stated in today's letter that a representative from CtW would attend the REIT's annual meeting in order to put the question directly to the board.
Prime, already under investigation by state and federal authorities for its uniquely high rate of septicemia, was identified by California Watch to have alarming rates of malnutrition, including hundreds of cases of Kwashiorkor, an extreme form of malnutrition typically found in famine-stricken populations. In its letters to the Medical Properties Trust board, CtW warned that if these incidences were proven to stem from systemic up-coding, Prime's potential liabilities could easily outstrip the operator's net income, posing considerable reimbursement risk to Medical Properties' shareholders.
"With the Federal government stepping up fraud prevention efforts […], we believe it is vital that Healthcare REITs, as part of their efforts to manage reimbursement risk, actively monitor the billing practices of key tenants and possible incidences of upcoding," wrote Mr. Patterson, noting that Medical Properties had failed to proactively respond to previous demands for a review. In addition to reviewing the situation at Prime, Mr. Patterson asked the board to clarify the status of federal and state investigations into Prime over possible Medicare fraud and to evaluate options for better monitoring of potentially fraudulent billing activities within the portfolio facilities.
Prime is a privately-held operator of acute hospitals in California. Medical Properties is a healthcare REIT focused on acute care facilities and headquartered in Birmingham, Alabama.
For further information please contact Michael Pryce-Jones at (202) 262-7437. Copies of CtW's correspondence with Medical Properties Trust can be accessed at www.ctwinvestmentgroup.com.
** NOTE: Please contact Michael Pryce-Jones at firstname.lastname@example.org or visit www.ctwinvestmentgroup.com. **
SOURCE CtW Investment Group