Prime Healthcare Services began in 1985 when Dr. Prem Reddy founded Desert Valley Medical Group in Victorville, California.

[3] In 1992, Reddy established Primecare Medical Group and two years after he started building Desert Valley Hospital in Victorville.

[14] In 2007, the Los Angeles Times ran a news story that alleged that the policies of Prime HealthCare Services, Inc., resulted in higher-than-average profits for the possible cost of patient care: "When Reddy's company, Prime Healthcare Services Inc., takes over a hospital, it typically cancels insurance contracts, allowing the hospital to collect steeply higher reimbursements.

It has suspended services — such as chemotherapy treatments, mental health care and birthing centers — that patients need but aren't lucrative.... On four occasions since 2002, inspectors have found that Prime Healthcare facilities failed to meet minimum federal safety standards, placing their Medicare funding at risk.

In June 2010 Kaiser sued Prime Healthcare for "trapping patients" and contended that Prime Healthcare needlessly admitted emergency department patients, rather than transfer them to Kaiser facilities and then sending their insurance companies highly inflated bills.

The investigation centers around whether the spike in sepsis represents a large public health issue or multimillion-dollar Medicare fraud.

In this incident, Randall Hempling, the hospital CEO, and Dr. Marcia McCampbell, its chief medical officer, showed up at the offices of the Redding Record Searchlight and successfully convinced the paper's editor not to publish an article, echoing the California Watch claims by reference to Courtois' actual medical records.

[39] In May 2016 US Department of Justice joined a qui tam case against Prime Health Care and its chief executive concerning Medicare fraud.