Arizona State Hospital not at risk of losing Medicare funds

PHOENIX - Arizona's state mental hospital is now in compliance with federal regulations and is no longer at risk of losing its Medicare funding, according to a letter from an official.

The letter from the Centers for Medicare and Medicaid Services(CMS), dated March 10, states that the psychiatric hospital now meets the requirements to receive Medicare funding. The hospital was notified in November that deficiencies in nursing care, patient rights and the hospital's oversight board could result in it losing its Medicare funds.

Read a copy of the initial inspection report.

The hospital has about 320 patients in three units: a 120-bed unit for civilly committed mentally ill patients, another 120 beds for people sent to the hospital by criminal courts and a sexually violent persons unit that holds 80 patients. The inspection covered only the civil commitment side.

The hospital received $11 million in Medicare and $52 million from the state general fund in 2011.

The inspection was launched because a series of ABC15 reports that exposed troubling details about violence at the hospital and a patient’s unnecessary death . The patient’s mother is in the process of filing a lawsuit , claiming negligence and that the hospital lied about the circumstances surrounding her son’s death.

State officials say they created and implemented a plan of correction in December, which they turned over to CMS. CMS inspectors visited the hospital again last month and found the plan had been put into place.

"Obviously, it's a decision that we expected as the outcome," said Cory Nelson, the state's deputy director for behavioral health, to the Associated Press. "We've said all along that it was our intent to continue to work on the quality improvement aspects that we've been focusing on at the hospital for some time."

Nelson and other state health and hospital officials have declined repeated interview requests by ABC15 to discuss the inspection.

The result surprises  insiders who believe the hospital still puts patients and staff at risk. The ABC15 Investigators have learned of several recent safety and security lapses that cast serious doubt that some of the most serious deficiencies have been corrected.

On January 17, a patient was able to steal an employee's badge, use it to get out of his unit, get past security checkpoints and enter another wing of the hospital where he violently assaulted another patient, sources said.

The attacked patient was supposed to be under constant watch by two staff members to protect him from himself and others.

The patient who escaped his unit also assaulted a second patient in November. That assault sent the victim to the hospital for almost two weeks with serious injuries.

The ABC15 Investigators have learned that CMS only inspected the hospital’s civil unit and were escorted by hospital representatives.  It did not inspect the forensic unit of the hospital, which houses patients deemed criminally insane.  

See more stories from ABC15’s ongoing investigation into the Arizona State Hospital.

Contact ABC15 Investigator Dave Biscobing at dbiscobing@abc15.com .

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