Feds: Cherry Hospital decertified
By Phyllis Moore
Published in News on September 12, 2008 1:50 PM
Cherry Hospital has had its federal certification revoked, which translates to the loss of an estimated $800,000 a month in Medicare and Medicaid funding.
News-Argus/File Photo
Cherry Hospital
The announcement, which came Thursday from the North Carolina Department of Health and Human Services, said the decertification by the federal Centers for Medicare and Medicaid, CMS, was effective Sept. 1.
The state also announced the hiring of a national company to provide independent, on-site management and training to help the state-owned psychiatric hospital develop and implement a corrective action plan.
The move comes a month after the facility was placed in "immediate jeopardy" after an Aug. 13 survey into complaints about patient safety and abuse, and nearly two weeks after a full survey conducted Aug. 26-31 further concluded that Cherry was still out of compliance with patient health and safety standards.
Despite the announcement and the loss of funding, however, the hospital will remain open with no disruption of services, said Leza Wainwright, co-director of the Division of Mental Health, Developmental Disabilities and Substance Abuse Services.
That means, however, that the state will likely have to pick up the tab for an estimated $800,000 per month in Medicaid and Medicaid reimbursements generated by patients at the hospital.
Meanwhile, Compass Group Inc. of Cincinnati, has been hired as an independent consultant to evaluate the operational and management structure of Cherry. The group's role will be to provide on-site management expertise and assess all aspects of the hospital's operations -- leadership, clinical care and compliance, medical staff and operations, Ms. Wainwright said.
A team from the Compass Group has been on the Cherry campus since Wednesday, said Tom Lawrence, public affairs director for the state's Department of Health and Human Services.
"They will be there for 10 days -- 10 working days -- at which time they will give a preliminary report to (DHHS and the Division of Mental Health) and then they'll go back to Cincinnati ... and do a much more in-depth report," Lawrence said.
The five-member group is comprised of the Compass president as well as a former hospital administrator and providers experienced with CMS, he said. Upon completion of their review, a contract will be developed with the company, which will be put in charge of managing the hospital until the problems are ironed out, Lawrence said.
Patient services are not expected to be affected during the process, he added.
"Those patients there will remain there," he said. "The state will have to pick up the tab and their care, as it were, that Medicaid will have been paying for. This does not mean that new patients will not be accepted. They will be, but we always have the option of sending them elsewhere."
Already, however, Cherry Hospital has closed 23 beds since the investigation into the death of 50-year-old Steven Sabock, who was allegedly left unattended for 22 hours in a dayroom. The ward on which he stayed was shut down and several staff members reassigned.
Despite the projected loss of an estimated $800,000 a month in funding, Lawrence said Medicaid will continue to pay for those already qualified for the next 30 days, at which time the state will be forced to assume the costs.
Officials were unable to speculate on how long it could be before the hospital is recertified for funding.
"We could reapply today but we clearly want to get the report in from the Compass group on how long they think it will be to implement the changes, etc.," Ms. Wainwright said Thursday.
Even though this is the second state hospital to undergo loss of federal funding -- Broughton in Morganton was the first a year ago -- Lawrence said this is the first time an outside group has been brought in to study a hospital's internal workings.
"I don't think we have anything to go on in that way," he said. "Of course we want it to be solved and back up and running just as quickly as we can, keeping in mind that some of these problems are systemic, (and it) may take some time to change the culture."
He explained that by "systemic," he means "the culture of the way the hospital has run for many, many years.
"There have been some morale problems and although Jack (St. Clair, hospital director) has done a great deal to help, problems still persist to a degree that has to change."
Some of those changes will likely include better training and hiring practices, Lawrence said.
"We have almost 1,100 staff members down there. Most of them, a very high percentage of them, are terrific people," he said. "They care, they work hard, they understand the problems, they're willing to work it out.
"But you'll find a few who just want to buck the system."
And, he noted, it's also "hard to know" if any staff or administrative jobs will be affected by the consultant's findings.
"I'm sure that they will put a lot of credence in what this Compass Group suggests or recommends," Lawrence said. "Nothing has been said specifically, and I believe that the two co-directors of the division have a great deal of confidence in Jack, but even so, he could still have problems that confidence isn't going to solve."
The initial contract period with Compass is from Sept. 12 to Oct. 15, and will cost $90,000.
All recommendations and reports will be delivered to division management, Ms. Wainwright said.
"We will certainly talk with them, make sure we understand the full extent of their recommendations and make sure they're all recommendations we can agree with ... and then negotiate," she said.
Once the recommendations are made, the next phase of the agreement will be the team's return to Cherry to enact the changes.
"The second part of the agreement is for (Compass) to be actually on site, working shoulder to shoulder with Cherry staff to implement those recommendations and help Cherry implement them," Ms. Wainwright explained.
The time and length of the oversight of day-to-day operations will be determined once the action plan is delivered and approved, she added.
This is the second time in a year that corrective measures have been taken to improve operations at Cherry. In September 2007, federal funding was in danger but a corrective plan was introduced and accepted.
The latest measures fell short of the deadline and CMS made the decision to drop federal funding.
"The first one that was immediate jeopardy, Aug. 13, they were developing a plan and people (in Raleigh and in Goldsboro) actually came up with a workable plan and submitted it," Lawrence explained. "The surveyors went back to see and while they were there, there were two more incidents -- one in which there was a patient-on-patient attack and one was a staff-on-patient attack -- and that threw everything into a tailspin.
"They went back the 31st of August and that's when they just came to the conclusion that not enough had been done quickly enough and recommended decertification."
DHHS Secretary Dempsey Benton even wrote a letter to CMS saying that he didn't feel what happened rose to the level of cutting off funding, Lawrence said, but to no avail.
And while the latest announcement affects many aspects of Cherry Hospital, it does not appear to have any bearing on efforts to build a new facility, he said.
"I don't think this would affect that at all," he said, indicating that project is being funded by the state and no mention has been made about changes to the timeline.