County Drops Plan to Fight Medicare Cutoff

San Diego County has abandoned its effort to win back Medicare funds for the county’s mental hospital in Hillcrest because the appeal might cost too much and might prove fruitless, a top county health official said Friday.

Dr. J. William Cox, director of the county’s Department of Health Services, said the hospital has overcome the problems that led officials to cut off Medicare funding 18 months ago, and he accused federally contracted reviewers of making unreasonable demands on the hospital.

The “hidden agenda of these so-called quality reviews,” Cox charged, is to cut money from the Medicare budget without doing so openly.

Cox said numerous agencies, including the state Department of Mental Health, have given Hillcrest positive reviews in recent months, but the federal inspectors demanded that Hillcrest provide “the ultimate in long-term care,” even though the facility is a crisis center designed to provide emergency and short-term care.

Cox, a former surgeon general of the Navy, said he has told the federal inspectors that they misunderstood Hillcrest’s basic function, but “they simply did not listen to me.” Many of Hillcrest’s patients are indigent.

Cox charged that the inspectors’ intransigence stems from the Reagan Administration’s efforts to chop federal health care spending.

Since Medicare funding to Hillcrest was cut off in February, 1986, the facility has tried to refer Medicare patients to other mental hospitals that do get Medicare funding, Cox said. The loss of Medicare cost Hillcrest about 12% of its $8 million budget. So far the hospital has made up the shortfall with additional county aid and by referring patients elsewhere.

No patients have been turned away as a result of the cutoff, Cox said.

“If there’s no place left to send them and we have a bed, we will accept them irrespective of whether they’re eligible for Medicare,” he said.

Cox said the quality of care at Hillcrest, much maligned by federal health officials in early 1986, has improved significantly. “Since November, 1985, every inspection of Hillcrest has resulted in a positive report--every inspection, that is, except one,” Cox said.

Dr. John T. Kelly, acting medical director of the agency that issued the report, said: “Based upon information available to us when we concluded the review in 1985, we made a recommendation to the inspector general that Hillcrest be excluded from the Medicare program.”

“The facility had the option to appeal, and they have obviously chosen not to,” he said. Kelly added that legally, the changes at Hillcrest are not relevant because an appeal can only be based on the conditions that prevailed at Hillcrest when the review was made in 1985.

Cox said that rule doesn’t make sense. “I just know that we’ve got a good hospital there and the sanctions should be lifted and they’re not being lifted,” Cox said.

Kelly noted that Hillcrest can reapply for Medicare funding when the sanction ends in February, 1989.

Cox, however, said that Kelly’s organization, the nonprofit California Medical Review Inc., probably would not give Hillcrest a clean bill of health in spite of the improvements that have been made.

“If the same reviewing agency is still in operation, then there’s really no point (in reapplying),” he said.

Cox said the legal appeals would have cost the county hundreds of thousands of dollars because dozens of witnesses would have to be brought in to testify in a lengthy trial. He added that he believed the county would have won the appeal, but that the government would have found a way to cut off Medicare funding again.

“My first inclination was to recommend to the Board of Supervisors that the county continue fighting and to proceed with the administrative appeal and federal court action,” Cox said. “However, I changed my position when I became aware that the contract reviewing organization would not acknowledge the major improvements made at the facility.”

Cox cited a recent state mental health report that said the services at Hillcrest “are well within the standard of excellence found in other acute psychiatric facilities in California.”