CareUnit Hospital to Lose Medicare, Medicaid Funds

Times Staff Writer

Citing a lack of proper documentation and violations of staff requirements, the federal government plans to stop Medicare and Medicaid payments to a St. Louis hospital owned and operated by Irvine-based Comprehensive Care Corp. on Oct 23.

The St. Louis facility receives more than $1 million in Medicare and Medicaid money a year, according to a copyrighted report by the St. Louis Post-Dispatch.

While a CompCare spokesman would not comment on the seriousness of the charges leveled against its CareUnit hospital by the Kansas City regional office of the Federal Health Care Finance Administration (HCFA), the spokesman did confirm the charges.

But, he said, the company believes that it has taken sufficient steps to correct the problems and is in the process of appealing the federal decision.

One industry insider, who spoke on condition that he remain anonymous, said that the federal action was "an indication of poor controls, which would imply poor management. It's not real often that somebody pulls the certification unless it was a serious problem."

One of 18 Facilities

The 144-bed hospital--which, ironically, was visited by Nancy Reagan in 1984 as part of her campaign to draw attention to the evils of drug abuse--is one of 18 such facilities treating drug and alcohol dependency owned by CompCare. In addition, CompCare operates 142 CareUnit treatment centers at hospitals it does not own.

Unlike most other CareUnits, the St. Louis CareUnit hospital also treats patients with psychiatric problems.

In August, CompCare was the subject of a critical report on ABC television's newsmagazine "20/20," which interviewed a former counselor at one of the company's CareUnit hospitals who said many of the teen-age patients never saw a psychiatrist or a psychologist, an allegation the company continues to vigorously deny.

The problems at the company's St. Louis hospital stem from a routine review conducted at the behest of the HCFA by the Missouri Department of Health in May, said CompCare spokesman Ken Estes. The investigation found that the CareUnit failed to have registered nurses working during certain shifts--a violation of the hospital's license, he said.

Investigators also discovered a lack of proper documentation on patient charts for verbal orders regarding care phoned in by physicians and cited the use of 'generic' patient treatment plans despite the patients' having different addictions and psychiatric profiles, Estes confirmed.

These violations of Medicare and Medicaid regulations were called to CompCare's attention in a May 19 letter which ordered the hospital's administrator, Thomas B. Edelstein, to correct the problems before July 25, Estes said.

A second survey in late August by HCFA investigators determined that the hospital was still not in compliance, and CompCare's corporate headquarters was notified by letter on Oct. 8 that, as of Oct. 23, all Medicare and Medicaid reimbursements to the hospital would be suspended, Estes said.

On Aug. 1, Estes said, Edelstein stepped down as hospital administrator to take a position supervising CompCare's contract operations with other Missouri hospitals and was replaced by Vincent Sullivan. Estes said the change in administrators was not related to the HCFA action.

On Oct. 10, two days after receiving the letter from HCFA alerting CompCare that as of Oct. 23 Medicare reimbursements would be cut off, Estes said, CompCare sent a letter to HCFA detailing steps that had been taken to correct the problem. The federal action would stop payments to CompCare's St. Louis facility for at least 60 days.

Hired Additional Staff

Although none of CompCare's remedial steps were undertaken until after Aug. 10--and most were not initiated until mid-September--the company has, according to the letter, consolidated patient groups to ensure adequate nurse coverage and hired eight additional nurses.

The company has also begun taking steps, Estes said, to hire two physicians and a quality control staff assistant as well as an assistant administrator to review the documentation on patient charts.

No steps taken by the company appear to specifically address the findings by the HCFA that patients at the St. Louis facility all had identical treatment plans.

Downplayed Loss

Estes downplayed the loss of revenue from the federal action. He said that at the 18 CompCare-owned hospitals, only 4% of revenues stemmed from Medicare or Medicaid reimbursements.

But in an interview with the St. Louis Post-Dispatch, the hospital's current administrator, Vincent Sullivan, confirmed that approximately 20% of the patients at the St. Louis CareUnit hospital were covered by Medicare or Medicaid.

Medicare is the federal health insurance program for the elderly and disabled. Medicaid is a federal-state program which pays medical bills for the poor.

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