Judge Blocks U.S. Cutoff of Medicare Funds at Hillcrest

U.S. District Judge William B. Enright issued a temporary injunction Thursday blocking the move by the federal Department of Health and Human Services (HHS) to cut off reimbursements for Medicare patients at the county’s Hillcrest mental health hospital.

Enright said he was making the ruling “to preserve the status quo so we can all take a good hard look at the situation.”

The revocation of the 62-bed hospital’s right to receive Medicare reimbursements was to have gone into effect Sunday for three years. The penalty was handed down by HHS after its investigators determined there was a “potential for patient harm” at the hospital.

San Diego County this week filed a lawsuit to overturn the loss of Medicare eligibility, which would be a severe financial blow. The Hillcrest facility was scheduled to receive about $1 million in Medicare reimbursements for the current fiscal year, representing 12.3% of its operating budget.

On Feb. 24, Enright will hear further arguments before ruling on the county’s request for a preliminary injunction to further delay the revocation until an administrative law judge, who represents the county’s only avenue for permanently reversing the ruling, hears the lawsuit. Attorneys for the county and the federal government said in court that the case probably would not reach the administrative law judge for at least 90 days.

Deputy County Counsel Phillip Kossy argued that the action was unjust because the hospital’s quality of care has vastly improved since May, when the 21 patients whose records were reviewed by HHS were staying at the hospital. He said the federal government “did not review all of the material available to it . . . (and that) there was no opportunity for the county to comment” on its findings.

“Progress has been made in vast ways,” Kossy said. “The county has been infusing a great deal of money to improve the situation. There are not serious problems at the hospital now.” Kossy also said most of the patients treated at Hillcrest, 90% of whom are referred by law enforcement agencies and many of whom are indigent, could not be treated at other hospitals in the county.

“In a tightly budgeted facility, the loss of 12.3% of the funding would cause havoc,” Kossy said. “The patient impact would be significant. These are unique types of patients who cannot be cared for elsewhere.”

But John Robinson, of the U.S. attorney’s office in San Diego, said inquiries by his office indicated that patients typically treated at Hillcrest could be cared for at six psychological hospitals in the county and eight acute care hospitals.

Robinson said “every step was properly followed” during the HHS investigation. “The only thing we’re talking about is who is going to pay (for the patients’ care). The government’s primary interest is in securing quality care for the patients,” he said.

Robinson criticized the county for not moving more quickly to correct deficiencies at the hospital. “Not until it became apparent that the federal government was serious were serious measures taken,” he said. “The county has known for a long time that problems existed. (The federal government) has got to see that the corrections remain in effect; that the county is serious about carrying out its plans properly. The exclusion (from Medicare) is designed to make them do better. These were highly qualified professionals” who made the decision to revoke the Medicare eligibility.