Indian-born billionaire whose hospitals are accused of birth tourism scheme received Biden award

The foundation created and led by Prem Reddy is in a bit of hot water.

Reddy's Prime Healthcare Foundation owns and operates a hospital in Mission, Texas, called Mission Regional Medical Center. On July 7, Republican Gov. Greg Abbott directed the Texas Health and Human Services Commission to launch an investigation into Mission Regional over allegations that it engaged in a birth tourism scheme.

'Federal prosecutors have been directed to "bring illegal birth tourism to an end" by prosecuting both those who engage in such conduct and those who solicit it.'

Abbott accused Mission Regional of advertising "BIRTH PACKAGES IN SOUTH TEXAS" in foreign countries in "an apparent effort to profit from securing United States citizenship for their children."

"American citizenship is not for sale, and Texas will not permit our health care system to be used as a magnet for birth tourism," stated the governor.

In its subsequent letter to Texas Attorney General Ken Paxton, the Texas Health and Human Services Commission highlighted reports that billboards promoting the alleged scheme were spotted in Mexico. The billboards reportedly referred would-be birth tourists to "havemybabyinTexas.com."

While the website appears to have been taken down, an archived version lists two hospitals as participants in the alleged scheme: Mission Regional and Knapp Medical Center in Weslaco — another Texas-based hospital owned by Reddy's foundation.

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Karen Ray, chief counsel for the Texas Health and Human Services Commission, said in the letter to Paxton, "Such birth tourism schemes not only exploit the extraordinary privilege of American citizenship, but also frequently involve 'lies about the purpose or duration of one’s travel to the United States.'"

"Accordingly, federal prosecutors have been directed to 'bring illegal birth tourism to an end' by prosecuting both those who engage in such conduct and those who solicit it for visa fraud, wire fraud, money laundering, misuse of identification, identity theft, and health care fraud," continued Ray. "While the allegations concerning Mission Regional Medical Center and Knapp Medical Center may not be identical to the schemes described above, they are equally troubling."

The HHSC referred the matter to Paxton, who confirmed on July 29 that he was investigating the two hospitals.

"My office will investigate any suspected illegal birth tourism schemes in Texas, including the operations of two South Texas hospitals that appeared to advertise birth tourism on a billboard near the border," said Paxton. "My office will continue to hold accountable any entity that knowingly facilitates fraud in our state."

Mission Regional chalked up the controversy to a misunderstanding.

A spokesman for the hospital said in a statement to Blaze News, "We recognize that a very limited marketing campaign may have caused unintended misunderstanding and was immediately discontinued. The campaign was meant to highlight services available to the communities we serve and was never intended to encourage any unlawful activity."

The spokesman noted that the hospital's supposedly "very limited campaign consisted of only two billboards located near the hospital and a website that generated very little patient volume, produced no financial benefit to the hospital, and was only intended as a service for the community, which is one of the most medically underserved regions of Texas."

"The hospital does not support or facilitate unlawful activity and has never operated its obstetric program with the intent of attracting individuals who are unlawfully present in the United States, promoting birth tourism, or encouraging travel to the United States for the purpose of obtaining U.S. citizenship for a child," said the spokesman.

According to Mission Regional's spokesman, Knapp Medical Center "did not actively participate in this marketing campaign with no involvement since 2024 and only had two elective deliveries of 684 deliveries this year."

Blaze News did not immediately receive a response from Knapp Medical Center or Paxton's office.

On July 21, Abbott issued an executive order tasking relevant state agencies with investigating claims of birth tourism schemes within the Lone Star State's health care industry. His office noted that "enforcement actions include revoking or suspending licenses, prohibiting participation in state contracts, denying state benefits, or pursuing other enforcement action under state law."

The EO references the two Prime Healthcare Foundation hospitals.

The scandal is a bad look for the foundation, as well as for its leadership — particularly for Reddy, its CEO, and Reddy's daughter, Kavitha Bhatia, who serves as president and chair of the Prime Healthcare Foundation.

In addition to receiving the Healthcare Lifetime Achievement Award from the Indo-American Chamber of Commerce, Reddy was presented with the Joseph R. Biden Lifetime Achievement Award in 2024.

Reddy's organization noted at the time that the award, which was part of the President's Volunteer Service Award program and given to certain individuals with a minimum of 4,000 hours of documented volunteer service, "recognizes Dr. Reddy's exceptional commitment and significant and sustained contributions to ensuring that communities have access to quality health care."

Reddy received the award even though he and his organization had in previous years reportedly paid over $100 million to the government as part of three separate federal civil settlements regarding alleged false claims to Medicare.

President and Jill Biden also posed for a photo with Reddy and Bhatia in 2022.

The founder of the scandal-plagued foundation isn't the only one in his family with a tight relationship with Democratic power.

According to Bhatia's bio on the Prime Healthcare website, she is a member of the Democratic Congressional Campaign Committee leadership circle for House Minority Leader Hakeem Jeffries (N.Y.) and California Rep. Ro Khanna (D).

Reddy and Bhatia were both born in India. Neither responded to Blaze News' request for comment.