Stanislaus hospital faces closure after Medicare decision. County, federal support sought

Stanislaus Surgical Hospital of Modesto notified the county last week that the hospital is likely to close April 30 for an undetermined time, due to a federal agency decision to remove it from the Medicare program.

Maria Munoz, human resources director for Stanislaus Surgical, informed Stanislaus County’s chief executive office that almost 200 employee layoffs are anticipated. The hospital said it was aggressively challenging the decision by the Centers for Medicare and Medicaid Services (CMS), which said the hospital failed to comply with nine conditions of participation in Medicare.

The 23-bed short-stay hospital on Oakdale Road has sought support from federal elected officials and the county in an attempt to delay the decision.

Hospital employees from administrative assistants to registered nurses and X-ray technicians would be laid off between April 29 and May 1, according to the April 15 letter to the county. “We will work with our local healthcare providers to assist with placing as many of our employees as possible,” Munoz wrote.

The CMS decision April 11 to terminate the for-profit hospital from Medicare was based on two surveys that uncovered health and safety issues that jeopardized patients, the agency said. Many of the allegations detailed in reports totaling 562 pages focused on equipment sterilization, infection control processes and patient safety in the hospital.

Medicare reimbursements for patient care are a key source of revenue for hospitals. Some facilities severed from the federal program are able to make extensive corrections and improvements and be restored to the program, but that process can take six months or longer.

Stanislaus Surgical Hospital has handled more than 400 elective surgical procedures per month. A temporary closure would require scheduling of surgeries at other facilities.

Liz Madison, a spokeswoman for Sutter Health, which owns Memorial Medical Center in Modesto, said Monday a hospital official wasn’t available to talk about the impact the hospital closure would have in the area. “We have connected with physicians from Stanislaus Surgical Hospital to evaluate how we can help accommodate procedures from the facility after April 30 so these patients may continue to access care they need,” Madison said.

Mark Hubbard, a spokesman for Stanislaus Surgical, cited a previous statement in saying the hospital “is doing everything it can to continue quality and needed healthcare in the community.”

Congressmen request that hospital be given more time

Rep. John Duarte, R-Modesto, asked for a 45-day extension on the CMS order in a letter Monday to the agency’s regional office in San Francisco and to Xavier Becerra, secretary of Health and Human Services. In a letter last week, Duarte and Republican Congressman Tom McClintock also asked Health and Human Services for more time.

Duarte claimed the survey process leading to the CMS action was improper and irregular. His letters do not dispute the health and safety allegations of the hospital inspectors but say the hospital wasn’t afforded the opportunity to correct deficiencies.

“We are deeply concerned about the extreme negative impact (that Stanislaus Surgical’s) improper Medicare program termination will have on Modesto and its surrounding communities,” reads the letter from Duarte and McClintock.

Duarte’s second letter notes that the hospital provided radiology, surgical and preventative screening services to 1,800 patients per month last year and that 60% to 80% of those patients were covered either by Medicare, the health program for seniors, or the state’s Medi-Cal program. The action to stop Medicare payments to the hospital, effective April 30, also would serve to halt Medi-Cal payments.

A follow-up survey completed Feb. 5 concluded that Stanislaus Surgical still was out of compliance with Medicare’s health and safety standards. Stanislaus Surgical received verbal notice of termination from Medicare three days before a CMS written notice April 11.

Mani Grewal, chairman of the county Board of Supervisors, said he would prefer that the federal agency give the hospital latitude for coming into compliance with the Medicare standards.

“If there are some things they need to fix, there is an intermediary process where they can help them get through some of those violations,” Grewal said. “We feel that is a better position than just shutting them down, especially when we are low on healthcare services in the county.”

Violations called immediate threat to patients

The regulatory surveys in August and February cited numerous violations of health and safety standards including the hospital’s handling of patient emergencies after surgeries and issues with infection prevention and control, sterilization processes and governance. The surveys also charged that nurse anesthetists were acting outside their scope of practice.

The California Department of Public Health conducted the surveys on behalf of CMS, demanding the hospital make immediate corrections in August regarding endoscope storage, workflow patterns, prevention of cross-contamination and biohazardous waste management.

The state inspectors declared the problems were an immediate threat to patients.

The findings from follow-up visits in January and February were highly critical of the practices of certified registered nurse anesthetists and the hospital’s care of patients who suffered complications after surgery. According to the surveys, inspectors found no records indicating staff provided urgent care to patients who became unstable after surgery, but instead called 911 to have an ambulance take the distressed patients to another hospital.

The regulatory inspections found the hospital didn’t have a “code blue” or rapid response team for patients in medical emergencies.

Stanislaus Surgical Hospital, which also owns Precision Imaging on McHenry Avenue and a pain management center, hasn’t said how long the hospital would be closed after Medicare payments are cut off April 30.