Prem Reddy, MD

The Founder Who Paid Personally

Founder, Chairman and Chief Executive Officer, Prime Healthcare

Director, 2027Acute care, 55 hospitals, private

Last verified November 6, 2026

Hospitals in 15 states, 2026

$103.75M

False Claims Act settlements, 2018 to 2021

$5.0M

Paid personally by Reddy in two of them

$375M

Price of eight Ascension Illinois hospitals, 2025

Overview

Prem Reddy, a cardiologist, built Prime Healthcare from one California hospital in 1994 into a 55-hospital chain in 15 states by buying distressed hospitals. Prime and Reddy have paid $103.75 million in three False Claims Act settlements since 2018. Reddy paid $5.0 million of it from his own pocket. In 2025 Prime bought eight Ascension hospitals in Illinois for $375 million, then cut pediatric, trauma and obstetric services. Two senators and a House member have demanded answers. Prime is private and publishes no financial statements.

Since April 2026

What has changed

April 14, 2026Illinois review board unanimously approves the Olympia Fields purchase. source
May 4, 2026Illinois Nurses Association and Aurora's mayor criticize Prime service cuts and push HB 4757. source
May 8, 2026Olympia Fields closes; Prime reaches 55 hospitals. source
September 4, 2026Obstetric suspensions at three Illinois hospitals; Rep. Underwood criticizes. source
October 14, 2026Reddy listed as a Director on FAH's 2027 board. source

The company

Prime Healthcare

•55 hospitals in 15 states and more than 360 outpatient locations. The nonprofit Prime Healthcare Foundation owns 21 of them (Prime, 2026).
•Prime is private. No revenue or net income figure is published.
•September 2024: $1.5 billion of senior secured notes due 2029 issued to retire 2025 notes and fund acquisitions.
•2025 ratings: Fitch raised the secured notes to B+ and Moody's raised the corporate rating to B2. S&P affirmed with a positive outlook (Prime release, August 2025).
•Franciscan Health Olympia Fields, bought May 8, 2026, was Prime's 55th hospital and ninth in Illinois.
•Leadership page lists Sunitha Reddy, Ravi Reddy and Seetha Reddy among the executives. Relationships are not stated.

Ownership and control

•Privately held and founder-led. Prem Reddy is Founder, Chairman and CEO (Prime leadership page).
•Two rails: the for-profit Prime Healthcare Services, Inc., which issues the bonds, and the nonprofit Prime Healthcare Foundation. The Foundation owns 21 hospitals and bought Central Maine Healthcare in February 2026.

Settlements, investigations and lawsuits

•August 3, 2018: Prime and Reddy agreed to pay $65 million. The claims: 14 California hospitals admitted patients who needed only outpatient care and upcoded diagnoses. Reddy paid $3.25 million personally. A corporate integrity agreement followed.
•February 14, 2019: $1.25 million over unnecessary short inpatient stays and upcoding at Roxborough Memorial and Lower Bucks hospitals in Pennsylvania. Reddy's personal share not found.
•July 19, 2021: $37.5 million with DOJ and the California Attorney General. Prime paid $33.7 million, Reddy $1.775 million, and a cardiologist $2 million. The claims: kickbacks tied to buying the cardiologist's practice to steer referrals, billing under a physician with revoked privileges, and inflated implant invoices. Five-year corporate integrity agreement for Prime and Reddy.
•May 20, 2025: Senators Durbin and Duckworth demanded answers on service cuts at the eight former Ascension Illinois hospitals. Prime replied it was losing nearly $200 million a year there.
•May 2026: the Illinois Nurses Association and Aurora's mayor criticized unit shutdowns at Prime hospitals. They backed HB 4757, which would let the state review board deny acquisitions.
•September 4, 2026: Prime announced it would suspend labor and delivery at three Illinois hospitals. Rep. Lauren Underwood called it a pattern of revenue-focused decisions and broken promises.
•No new False Claims Act settlement or DOJ action against Prime or Reddy was found for January 2025 through November 6, 2026.

Compensation

Year	Total compensation	CEO-to-worker pay ratio
2025	Not public (private company)	Not public

Deals since 2025

•March 1, 2025: completed the purchase of eight Ascension Illinois hospitals for $375 million, pledging $250 million of investment. A ninth, Ascension St. Elizabeth, closed before the deal did.
•February 16, 2026: the Prime Healthcare Foundation took over Central Maine Healthcare, three hospitals, by membership substitution. It assumed the debts and pledged $150 million over five years.
•May 8, 2026: Olympia Fields purchase closed after an 8 to 0 Illinois review board vote. Becker's reports $101 million in private bonds plus an $18 million reserve fund.
•September 2026: labor and delivery suspended at Saint Joseph's (Joliet), Mercy (Aurora) and Resurrection (Chicago). Prime cited fewer than one delivery a day. A $1 million maternal care grant to two other hospitals was announced the same month.

Political giving

•Reddy's individual federal contributions since January 2025: not retrieved. One FEC query reported 14 records before the API rate limit closed; the records were not captured.
•A Prime Healthcare PAC could not be identified in FEC records on November 6, 2026.

Red flags

Conflicts and concerns

Three False Claims Act settlements in four years, two of them with Reddy paying personally, and two corporate integrity agreements.

The 2021 settlement included billing under a physician whose privileges had been revoked and kickbacks to buy a cardiologist's referrals.

Within 18 months of buying eight Illinois hospitals, Prime suspended obstetrics at three of them and drew letters from two senators and a congresswoman.

A nonprofit foundation controlled by a for-profit founder now owns 21 hospitals, including three in Maine acquired by taking over the nonprofit's membership.

Physician-owned hospitals

Prime's model is buying hospitals that nonprofits want to shed, then cutting the services that lose money. A physician-owned competitor in Joliet or Aurora could offer the obstetrics Prime dropped. The ban means the only alternative buyer for a failing hospital is another chain. Reddy, himself a physician, sits on the board that keeps other physicians from owning.

Sources