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Kansas Considers Recertification Options For Osawatomie State Hospital

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Kansas News Service

Kansas is pursuing a little-trod path to try to regain federal funding for Osawatomie State Hospital.

The state-run hospital, which treats mental health patients deemed a danger to themselves or others, lost federal payments in December 2015 due to concerns about unsafe conditions. It still can care for patients but doesn’t receive any payments from Medicare or a federal program to offset the costs of uninsured patients.

Normally, a hospital that loses its certification has to pass two inspections to prove that it took care of the problems and is a safe place for patients covered by Medicare. Tim Keck, secretary of the Kansas Department for Aging and Disability Services, recently told legislators that Osawatomie State Hospital has been ready for inspections since August. But he said the hospital is at the bottom of the Centers for Medicare and Medicaid Services priority list for inspections.

Gov. Sam Brownback and Tom Price, secretary of the U.S. Department of Health and Human Services, recently discussed using a process known as a systems improvement agreement instead, Keck said, adding that he intends to urge the Kansas congressional delegation to help push for an agreement.

CMS isn’t required to approve a systems improvement agreement, even if the state decides to pursue one. If such an agreement does move forward, however, it would be unusual. Federal officials said CMS typically only offers the agreements to facilities that have maintained certification.

Kate Fenner, CEO of Compass Clinical Consulting, an Ohio-based firm that specializes in hospital and health system performance, said she had never heard of a decertified hospital using a system improvement agreement. Typically, a hospital enters into an agreement after CMS has found a significant problem but before it stops payments, she said.

“It’s a last-ditch attempt to stay in” the Medicare and Medicaid programs, she said. “I have not heard of anyone who’s been decertified being readmitted to the program through an SIA.”

The agreements typically give hospitals a year to fix problems that would put patients in danger, Fenner said. Generally, they have to hire a consultant, who meets with CMS to report on the hospital’s progress, she said.

Osawatomie State Hospital already has retained a consultant to help it regain Medicare payments, but it isn’t clear if that arrangement would satisfy CMS. Angela de Rocha, a KDADS spokeswoman, said the department doesn’t yet know many details about what it might need to do under a systems improvement agreement.

Brownback’s office also didn’t provide details about what the state hospital would need to do under an agreement. Spokeswoman Melika Willoughby said the governor had discussed “the Obama administration’s refusal to inspect and recertify Osawatomie State Hospital.”

“We are encouraged by Secretary Price’s willingness to work with us to serve vulnerable Kansans,” she said.

But CMS officials said via email that an increase in facilities seeking certification and limited resources have contributed to the inspection delay. They noted a 2007 document on CMS policy that outlines how facilities that aren’t part of Medicare and Medicaid are in the lowest-priority tier for inspections if they can be accredited instead by a private organization like the Joint Commission. Keck recently said that KDADS also is considering that certification process, although the state would have to pay for it.

Download the CMS document on Medicare certification.

Other questions about Osawatomie State Hospital’s future remain unresolved. Keck told lawmakers that the department still is analyzing a bid from Correct Care Solutions to privatize the hospital.

Department officials haven’t decided whether to pursue privatization, Keck said. If they do, any proposal will be presented to the Legislature for approval, he said.

While many lawmakers tout their belief in the free market, they haven’t embraced the idea of privatizing a state hospital. Several bills passed last year contained provisions forbidding KDADS from moving forward with privatization without legislative approval.

A similar provision showed up again this year in a Senate Bill 32, which would provide loans to a small number of psychiatric residents, indicating legislators want to reinforce their intention to have the final say on the future of Osawatomie State Hospital. The House and Senate have approved the bill.

Meg Wingerter is a reporter for the Kansas News Service, a collaboration of KCUR, Kansas Public Radio and KMUW covering health, education and politics in Kansas. You can reach her on Twitter @MegWingerter. Kansas News Service stories and photos may be republished at no cost with proper attribution and a link back to kcur.org.

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