Agency head: State can appeal decision to cut off Medicare payments to Osawatomie hospital

TOPEKA – Kansas could appeal the federal decision to cut off Medicare reimbursements to Osawatomie State Hospital, the outgoing head of the state agency that runs the hospital told lawmakers Tuesday.

The Center for Medicare and Medicaid Services terminated Medicare reimbursements for the hospital, which provides psychiatric treatment, after finding that it had failed to supervise care, perform safety checks and protect suicidal patients, calling it a “systemic failure.”

Kari Bruffett, the secretary for the Kansas Department for Aging and Disability Services, told a panel of lawmakers that the state can appeal the decision and immediately reapply for Medicare certification. She said a longer-term solution would be to pursue a public-private partnership for the facility.

No decision has been made yet by Gov. Sam Brownback’s administration on how to proceed.

The hospital in eastern Kansas cares for patients admitted involuntarily from Sedgwick County and other counties.

Bruffett said the majority of the patients at the hospital do not have insurance. The loss of Medicare certification would negatively affect the amount the hospital receives in federal disproportionate share payments, money that is meant to support hospitals that face higher costs because they disproportionately serve low-income populations.

Federal disproportionate share payments could be affected by as much as $600,000 for one month, Angela de Rocha, a spokeswoman for the aging and disability services department, said later. Medicare payments to the hospital totaled $1.8 million during the first five months of the current fiscal year, July through November.

The hospital now has 14 patients on Medicare, less than 10 percent of all patients, de Rocha said, adding that Medicare reimbursement for those patients would continue up to 30 more days.

Bruffett said the hospital would continue to serve patients despite the loss of federal funding.

Sen. Jim Denning, R-Overland Park, said lawmakers should be prepared to allocate about $1 million a month from the state’s general fund until the state resolves the issue with the federal government.

Bruffett is leaving the department at the end of the week to work at the Kansas Health Institute.

The question of what to do with Osawatomie will be a pressing one for her successor and lawmakers when they convene the 2016 session in two weeks.

Tim Keck, an attorney who has served as chief counsel for the Kansas Department of Health and Environment since 2011, will replace Bruffett on an interim basis after Dec. 31.

Bruffett was grilled by Democrats during her appearance before the KanCare Oversight Committee on Tuesday.

Rep. Jim Ward, D-Wichita, noted that a November survey by the Center for Medicare and Medicaid Services found that security staff members were not performing mandatory safety checks in a hallway where a female staff member was raped by a male patient in October. He pointedly asked Bruffett whether anyone had been fired for the problems at the hospital.

Bruffett did not answer that question after Sen. Mary Pilcher-Cook, R-Shawnee, the committee’s chairwoman, skipped over it. A spokeswoman for the agency said in an e-mail Tuesday afternoon that the agency is unable to comment on personnel matters.

Ward and Pilcher-Cook had a series of heated exchanges during the hearing, with Ward accusing Pilcher-Cook of acting like a dictator at one point. Pilcher-Cook cautioned the committee against going “too far or too deep” on Osawatomie on Tuesday when the committee had a number of topics it needed to cover. She said she would hold a separate and more thorough hearing on the hospital during the session. She is chairwoman of the Senate Public Health and Welfare Committee.

This story was originally published December 29, 2015 at 1:08 PM with the headline "Agency head: State can appeal decision to cut off Medicare payments to Osawatomie hospital."