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Montana State Hospital set to lose $7 million in federal funds

Montana State Hospital
Posted at 12:50 PM, Apr 11, 2022

WARM SPRINGS — The Montana State Hospital will lose about $7 million in federal funding after it failed to meet basic health and safety standards, even after multiple warnings from the federal government.

The Centers for Medicare and Medicaid Services issued the letter terminating its provider agreement with the hospital Friday. The federal agency said the involuntary termination of its provider agreement was a last resort. In February, after inspectors found deficiencies at the state hospital that led to patient deaths, the agency gave hospital administrators until March to improve conditions. The agency extended that deadline, but in its letter said the hospital failed to come into compliance.

Montana State Hospital is the only public psychiatric hospital in the state and, as of April 4, it housed 142 patients.

Lawmakers appropriated about $47 million per year to run the state hospital, said Jon Ebelt, spokesperson for the state's Department of Public Health and Human Services. On average Medicare and Medicaid reimburses the state about $7 million a year for state hospital services. In its last budget status report, the state hospital was $7.4 million over budget for the fiscal year, Ebelt said. The state will not be reimbursed for any services provided to Medicare and Medicaid patients admitted after April 12. Payment may continue for up to 30 days for patients admitted before April 11.

The end of reimbursement will not disrupt services or care, Ebelt said.

Disability Rights Montana Executive Director Bernie Franks-Ongoy said Medicare’s decision raises serious concerns. Disability Rights Montana is the designated protection and advocacy system in the state for people with disabilities. The organization’s staff has 24/7 access to facilities such as the Montana State Hospital.

Without Centers for Medicare and Medicaid, the health department will run the hospital on a state license. The state will be monitoring itself, Franks-Ongoy said.

“We’ve lost the money and we’ve lost the oversight,” she said.

Inspectors on behalf of the Centers for Medicare and Medicaid wrote the report the hospital failed to protect patients from serious falls. The lack of care led to the death of a 74-year-old dementia patient. Inspectors also found the hospital also did not have an adequate plan for preventing the spread of COVID-19 within the facility.

The hospital will reapply for certification when its programs are ready, Ebelt said. The state health department has contracted with Alvarez and Marshal Public Sector Services, LLC., which will assess all state-run health care facilities and develop a strategic plan to enhance care and improve operations, Ebelt said.

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Editor's Note: This article was updated with comment from DPHHS and Disability Rights Montana.