Hospital chain Prime Healthcare Services was highly rated by a reputable analytics service for the quality of its care. But, as described in a report by the Center for Investigative Reporting, (CIR) its profile might be less an accurate appraisal than a fictional goal.

The California-based chain, says the CIR, “might be receiving five-star health care ratings because it exaggerates how ill its patients really are,” according to state lawmakers who sent the company a letter suggesting Prime’s rating by Truven Health Analytics is bogus.

Truven crunches data, promising “unbiased information, analytic tools, benchmarks and services to the healthcare industry” used by consumers and health-care professionals (hospitals, government agencies, insurers, pharmaceutical and medical device companies) to assess quality.

It’s not only members of the California legislature who question Prime’s integrity – the company has acknowledged that the U.S. Justice Department is investigating Medicare billings for the 23-facility, five-state chain. In June, Prime paid a $275,000 settlement over allegations that it had breached federal patient privacy laws.

So how, then, can Truven rate Prime as one of the top 15 U.S. health systems three times in the last five years? This year, according to CIR, eight of the company’s hospitals were ranked in the top 100 hospitals in the U.S., more than any other California chain.

A few months ago, the legislators asked Truven to recompute the ratings given to Prime, saying that the metrics are “so at odds with the company’s reputation and record in California as to strain Truven’s own credibility.”

But Truven defended the ratings, explaining that they’re based on Medicare data collected by the government. An earlier series of stories by CIR recounted how Prime Healthcare recently has billed Medicare for treating what the lawmakers called “implausibly high rates” of unusual medical conditions.

According to CIR, Prime Healthcare’s hospitals have reported that many Medicare patients were afflicted with unusual medical conditions, including kwashiorkor, a form of malnutrition usually found among children in famine-plagued Africa. “Billing for those conditions qualified Prime for bonus payments from Medicare worth millions of dollars, federal records show,” CIR reported.

Last year, some Prime employees testified at a legislative committee hearing that the chain’s founder had urged staff to pad or “upcode” Medicare billings with exaggerated diagnoses in order to collect bonus payments. Company officials said the testimony was a tactic used by an unhappy union.

The letter to Truven claimed that it had ignored the questionable billings and skewed the analysis, because hospitals that cure patients with severe illnesses get higher ratings. The numbers are better also if patients have shorter-than-average stays and no complications later.

But, the lawmakers wrote, “If patients are not as sick as reported to Medicare, doesn’t that lead to better-than-expected outcomes when the patients are discharged more quickly than expected, and die less frequently?”

This scenario, apart from identifying what might be dishonest doings, points up the difficulty of hospital ratings, and the challenge consumers have in appraising their hospital options. (See our blog, “An Insider Dishes About Hospital Ratings.”)

The best approach to assessing the quality of care you or a loved one might get from a certain hospital is to review several different rating sites, and read about the factors they consider. Give more weight to the factors most important to you, and be mindful that everyone has some kind of bias.

Rating sites include: Consumer Reports; Leapfrog Group; U.S. News and World Report; Hospital Compare; and The Joint Commission.