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Hacienda HealthCare agrees to give licensing authority over to Department of Health

Posted at 8:49 AM, Feb 08, 2019
and last updated 2019-02-09 10:43:49-05

PHOENIX — Hacienda HealthCare has responded to state officials, agreeing to give licensing authority over to Department of Health.

Multiple state agencies have said they opposed the abrupt closure of a Hacienda HealthCare unit where an incapacitated woman was raped, became pregnant and gave birth last year.

Officials say they have concerns over patients being moved out of the wing and transitioned to other facilities with insufficient plans in place.

"The state has concerns over the confirmation in your communications that the facility will be closing with little detail or clarity in your plan to move forward," a letter from AHCCCS reads. See the full letter below.

The decision to close the unit, announced Thursday afternoon, was made by the company's board of directors.

In a statement, the company said the board "has come to understand that it is simply not sustainable to continue to operate our Intermediate Care Facility for the Intellectually Disabled."

FULL COVERAGE: Hacienda HealthCare investigation

The healthcare facility said they would be working with state agencies to transfer patients out of the wing "in the weeks and months ahead."

The state had ordered Hacienda to hire a third-party management team to oversee daily operations after the revelation that an incapacitated woman who lived at the facility since age 3 gave birth on Dec. 29. But Hacienda and the outside party could not come to a long-term agreement.

The Department of Economic Security on Thursday issued an initial statement in response to Hacienda's decision, saying:

“This is very disturbing news. We want to find a path forward that is in the best interests of the patients — and this approach is not it. We encourage Hacienda to work with the State to find a path forward. State agencies are exhausting all efforts to bring this to a conclusion that is beneficial to the patients, some of whom have been at this facility nearly their entire lives. They are the ones who should come first, without question. This approach simply does not meet that test.”

In their Friday letter, AHCCCS and DES said they had several questions about Hacienda's plans that they requested answers to by 4 p.m. Friday. See the questions below.

  • Was the vote of the Hacienda Board of Directors to formally and unconditionally close the ICF-IID? If the vote was conditional, please provide the conditions. Please provide the State with a copy of the Board resolution.
  • How does this decision comply with paragraph 5 of Hacienda’s contract with DES (ADES 18- 00007493) which states: “5. Contract Changes. The Contractor shall not terminate the operations of the ICF/IID institution without the prior written consent of the Department during the term of this Contract.”?
  • Does Hacienda intend the letter of February 6, 2019, to serve as its notice to DES/DDD that it is terminating its contract with DES (ADES 18-00007493)? If not, please provide a specific date by which that notice of termination will be sent.
  • With respect to the ICF-IID, Hacienda notified the Arizona Department of Health Services of its plan to close the facility; however it did not indicate its intent to relinquish its Medicare/Medicaid certification as required by 42 C.F.R. 438.75, nor was the notice sufficient. Please provide a specific date by which that notice will be sent.

In a response to the 4 p.m. deadline, Hacienda HealthCare released the following statement stating they are willing to enter an agreement with the Department of Health Services:

"Hacienda responded to AHCCCS’ and DES’ request by the 4 p.m. deadline, indicating that they are willing to enter an agreement with the Department of Health Services (ADHS) to voluntarily permit ADHS to exercise licensing authority over the ICF-ID, with the understanding that an agreement would need to be reached.

Given the high medical risks associated with transferring these patients, moving this medically fragile community is the option of last resort and not the state's goal.

We are confident that with ADHS exercising licensing authority, and a continued commitment by AHCCCS and DES to do everything they can to ensure the health and safety of members, this is the best immediate outcome for all parties involved."

A spokesperson for Governor Ducey's office released a statement following Hacienda's decision:

"Just before 4:00 p.m. today our agencies received written confirmation from Hacienda expressing their intent to accept voluntary regulation from the Department of Health Services. This is good news and the best immediate outcome as it means Hacienda patients and families would be allowed to say in the home they've known for years while ensuring new and enhanced protections and oversight are put in place. Due to the medically fragile condition of this community, keeping patients where they reside was always our preferred choice and the safest option for patients. Our agencies will continue to work with Hacienda to implement a voluntary regulatory agreement with strong oversight and accountability measures that ensure safety and quality care going forward for patients."

Sources told ABC15 Wednesday that state health agencies had been making calls to healthcare providers across the state as a precaution, should patients need to be transferred. Hacienda's statement did not address whether the patients would be moved to other facilities they operate or to ones owned by other companies.

The victim gave birth on December 29. The baby boy is reportedly in good health.

A former nurse at the facility, Nathan Sutherland, has been arrested in connection with the sexual assault. Police say DNA evidence connected from Sutherland and the baby is a match.

In a statement to ABC15, Governor Doug Ducey says the announcement to move patients is “very concerning.”

“We find this announcement very concerning. State agencies have been actively working to increase oversight at this facility to ensure patients are safe and well cared for. For some patients at the facility, this is the only home they know or remember. Forcing this medically fragile community to move, should be a last resort. Everyone’s first priority should be protecting their health and safety.”