Fountain Valley Hospital Escapes Medicare Loss

Declaring that most deficiencies in patient care had been corrected, federal officials on Tuesday withdrew their threat to halt all Medicare payments to Fountain Valley Regional Hospital and Medical Center.

Investigators have concluded that the hospital violated both California and federal “anti-dumping” laws by failing to treat a pregnant Medi-Cal patient who needed emergency care and referring her to another hospital, said David Owen, a certification specialist with the U.S. Health Care Financing Administration.

But since the March dumping complaint and state and federal investigations that followed it, Fountain Valley has corrected nearly all its problems, Owen said.

‘They Fixed What Was There’

The hospital will continue to be monitored until its quality-assurance plan is acceptable, but “we’re going to rescind that termination notice because the situation of immediate jeopardy to health and safety has been removed,” Owen said. “They fixed what was there.”

Among the improvements at Fountain Valley since Owen’s agency issued a rare “notice of termination” June 20, Owen said, were new procedures to assure that each emergency room patient is medically evaluated.

In the incident that prompted the federal agency’s threat to halt Medicare reimbursements, the pregnant woman, a “high-risk” obstetrics patient whose membranes had ruptured, was not seen by any physician even though her condition constituted “an obstetrical delivery emergency,” according to a state licensing report.

A follow-up review by federal officials showed that “conditions for emergency services were out of compliance” at the hospital, Owen said.

While the threat of federal penalties has been withdrawn, the 287-bed hospital could still face state penalties for its dumping violation. Officials with the California Department of Health Services are continuing to review the case, said Jacqueline Lincer, a regional licensing official based in Santa Ana.

But late Tuesday, Fountain Valley’s acting administrator, Richard E. Butler, expressed relief at the decision to continue Medicare reimbursements.

“We regard our Medicare business as an important part of our business. We’re obviously pleased that the termination notice was withdrawn,” Butler said. He noted that Medicare reimbursements constitute 22% of payments to the hospital.

Butler declined to give the hospital’s account of the alleged dumping violation. He did say that if there had been a problem in treating an obstetrics patient, it was unintentional.

“We’re subject to being surveyed so what we judge to be proper and what others judge to be proper” may differ, he said.

According to the March 3 state licensing report on the alleged dumping incident, a 36-year-old former drug addict who was regarded as a high-risk obstetrics patient came to the Fountain Valley hospital’s emergency room. Her pregnancy was at term and in an indication that delivery of her baby was imminent, her membranes had ruptured more than 24 hours earlier, the report said. According to that report, she met Medi-Cal criteria for “an obstetrical delivery emergency” at a hospital that was a Medi-Cal contractor.

‘Not Seen by Physician’

However, the report said, “no staff obstetrician was willing to care for this patient. The ‘on call’ physician had resigned and no replacement was provided. . . . She was not seen by a physician at all; only the tracing from the fetal heart monitor was reviewed by the Chief of Service.”