CMS Action Against West Texas Hospital

Statement

Sen. Chuck Grassley today issued a comment about the action taken late Friday by the Centers for Medicare and Medicaid Services to terminate the Medicare provider agreement it holds with the West Texas Hospital.

Sen. Grassley's comment:

"I'm alarmed that the subsequent review of this physician-owned specialty hospital revealed so many serious deficiencies especially since it was basically given a ‘second chance.'

To the extent these deficiencies are products of how these physician-owned specialty hospitals are operated, Congress must act quickly to address the situation. I want to make it clear that the termination of this facility's Medicare provider agreement does not end our work in this matter.

There are many unanswered questions like how was this physician-owned specialty hospital allowed to become a Medicare provider at a time when the law prohibited it? Also, why was a hospital that is so out of compliance with so many Medicare Conditions of Participation given a "seal of approval" by The Joint Commission less than two years go? The care that these physician-owned facilities provide warrants a closer look as well as the policies and procedures of CMS and the organizations they rely on such as their Medicare contractors and The Joint Commission."

According to the Centers for Medicare and Medicaid Services, the agency will terminate the hospital's provider agreement on March 31, 2007. Following a complaint survey on February 7, 2007, West Texas Hospital was placed on a termination track due to deficiencies which represented a serious and immediate threat to patient health and safety. The hospital was originally out of compliance with the Medicare hospital Conditions of Participation for
Governing Body, Patient Rights, Nursing Services, and Emergency Services.

Following the hospital's submission of a plan of correction, a revisit and full survey of all hospital Conditions of Participation was conducted on March 8, 2007. Eight Conditions of Participation were out of compliance:

42 CFR 482.12- Governing Body
42 CFR 482.13- Patient Rights
42 CFR 482.21- Quality Assessment and Performance Improvement Program;
42 CFR 482.22- Medical Staff;
42 CFR 482.23- Nursing Services;
42 CFR 482.30- Utilization Review;
42 CFR 482.41- Physical Environment; and
42 CFR 482.42- Infection Control.

The continued non-compliance with the Conditions of Participation for Patient Rights, and Nursing Services, with the addition of Physical Environment, represents an immediate threat to patient health and safety, and thus the hospital's Medicare provider agreement will be terminated. With termination, the facility enters a 30-day transition period in which Medicare payments will be available for inpatient services rendered to patients who where admitted prior to March 31, 2007.

The hospital has the right to appeal this termination action. However, Medicare payment does not continue during an appeal process. The termination decision would be rescinded if a hospital were successful in its appeal. At that time, a hospital would regain its original provider agreement and could seek payment for Medicare-covered services rendered after the rescinded termination date.

If West Texas Hospital were to reapply for Medicare certification, it would first have to demonstrate, via an on-site survey, compliance with the deficiencies that caused termination.

Then, a reasonable assurance period would be established, during which the hospital would have to demonstrate sustained compliance with all hospital Conditions of Particiption. The reasonable assurance period can be between 30-120 days after the first survey is conducted.

Grassley record on specialty hospital issue:

In 2003, a moratorium on Medicare payments to new physician-owned specialty hospitals was included in the the Medicare Prescription Drug, Improvement and Modernization Act, for which Sen. Grassley was the principal Senate author. When this statutory moratorium expired in June 2005, he urged the Centers for Medicare and Medicaid Services to suspend
enrollment of new facilities. In the Deficit Reduction Act of 2005, for which Sen. Grassley was the primary sponsor of the Senate provisions affecting Medicare, Congress prohibited the Centers for Medicare and Medicaid Services from approving new specialty hospitals until August 2006, when Medicare officials delivered a plan for addressing the issue. As Chairman of
the Senate Finance Committee from 2003-2006, Sen. Grassley convened two hearings on specialty hospitals and highlighted a report about the problems caused by specialty hospitals from the Medicare Payment Advisory Commission. In 2005, Sen. Grassley introduced the Hospital Fair Competition Act with Sen. Max Baucus. This bill would have prohibited physicians from referring Medicare and Medicaid patients to new specialty hospitals in which
they have an ownership interest.

This year, Sen. Grassley has been asking questions with Sen. Baucus and Rep. Stark about the West Texas Hospital.

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