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Calif. hospital remains in Medicare after federal reversal

Stanislaus Surgical Hospital of Modesto had received political support after challenging the Medicare program decision.

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Stanislaus Surgical Hospital of Modesto

By Ken Carlson
The Modesto Bee

MODESTO, Calif. — A federal agency reversed an April 11 decision to remove Stanislaus Surgical Hospital of Modesto from the Medicare program. The reversal came after the hospital received political support from congressional officials last month.

The hospital released a letter from the Centers for Medicare and Medicaid Services showing the 23-bed facility on Oakdale Road is granted more time to make corrections and submit an acceptable plan to address health and safety deficiencies cited in regulatory inspections in August and February.

According to the letter, the hospital’s provider agreement to serve Medicare patients remains in effect. As of noon Wednesday, the federal agency had not confirmed the new development. The surgical hospital, owned by a group of accountants and physician shareholders, serves about 1,500 patients a month.

Rep. John Duarte, R-Modesto, and Rep. Tom McClintock, R- Elk Grove, asked the Centers of Medicare and Medicaid Services to reconsider the April decision, citing “irregularities” in the survey process and the impact that stopping Medicare reimbursement payments would have on delivery of patient care. The congressmen asked for an extension of the CMS termination order, which had been set to take effect April 30.

The inspections in August and February found the short-stay hospital was not in compliance with nine conditions of participation in Medicare, the national health program for adults 65 years and older and disabled people. The California Department of Public Health conducts hospital inspections on behalf of CMS.

The regulatory surveys sharply criticized Stanislaus Surgical for its handling of medical emergencies when patients suffered complications of surgery. The surveys also focused on infection prevention and control, sterilization processes, governance and other health and safety issues that jeopardized patients.

Hospital has laid off some employees

In the newly issued notice Friday, CMS said it rescinded the April 11 decision based on “additional documentation and information” it received. The hospital had been scaling back operations and laid off some employees.

” Stanislaus Surgical Hospital is grateful to CMS for the reconsideration of the original decision,” the hospital said in a statement. The hospital noted it has a 5-star patient satisfaction score published by CMS and will “continue to prioritize the provision of high-quality patient care going forward.”

Other Central Valley lawmakers signed on to the effort to support Stanislaus Surgical. The hospital now has until May 15 to submit a plan for correcting all outstanding deficiencies. CMS expects the hospital will include dates in the plan for being in full compliance with Medicare program requirements.

Mike Ferreira, who worked at Stanislaus Surgical for eight months, was critical of the political support for the hospital. “That is what political power will get you,” he said. “I think the inevitable is being put off.”

Ferreira, a heating and cooling system engineer who left for another job in August, said the 40-year-old hospital building has been neglected. He said a couple of operating rooms had problems with humidity, causing moisture to drip from windows, an issue identified in a survey as increasing infection risk.

“The chiller on the old HVAC system was always failing,” Ferreira said.

Hospital to receive unannounced inspection

The May 3 notice said an unannounced inspection will be conducted before July 31 “to determine whether (Stanislaus Surgical) has substantially complied with the conditions of participation and further assess whether it has made sufficient progress in being primarily engaged in providing inpatient hospital services.”

The inspectors cast doubt on the hospital’s status as an inpatient facility with findings in August that the average daily census was 1.5 patients, with an average length of stay of 1.34 days. There were 290 inpatient procedures compared to 5,200 outpatient procedures performed at the hospital in the past year.

CMS offered an expedited process for converting the Modesto facility to an ambulatory surgery center, but Stanislaus Surgical will attempt to remain certified as a hospital, the CMS notice indicates.

A hospital spokesman was asked Tuesday how the hospital will provide immediate care for patients who suffer medical emergencies after surgery. One survey blasted the hospital for not having appropriate staff available for those emergencies. As a routine practice, staff called 911 for an ambulance to take the patient to another hospital, the survey found.

“We are fully cooperating with CMS in putting together a corrective action plan that will address the concerns they have,” spokesman Mark Hubbard said, without providing specifics.

The hospital notified Stanislaus County officials last month it was likely to close due to the loss of crucial Medicare payments and that almost 200 employees would lose their jobs. Hubbard said Tuesday there were 15 layoffs and employee furloughs before the decision Friday to let the hospital stay in the Medicare program.

CMS originally faulted the hospital for noncompliance with Medicare requirements in August and for still being out of compliance when inspectors revisited the facility in January and February.

According to an April 18 letter from Duarte and McClintock to Health and Human Services Secretary Xavier Becerra , Stanislaus Surgical submitted a correction plan in late September and received a Nov. 2 communication from CMS that effectively gave the hospital until November 2024 to avoid Medicare program termination.

The congressmen expressed concern that termination from the Medicare program would reduce access to radiology services, surgical interventions and preventative screening procedures.

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