Hospital sues to keep government funding

Select Specialty Hospital-St. Louis, a long-term acute care hospital based inside Forest Park Community Hospital, is fighting to keep its Medicare and Medicaid funding.

On Thursday, Senior U.S. District Judge Scott O. Wright granted a temporary restraining order prohibiting the U.S. Department of Health and Human Services from terminating the hospital’s Medicare provider agreement.

In a lawsuit filed Monday, the hospital said the Department of Health and Human Services violated the law when it announced Select Specialty’s agreement would be terminated this month.

Kansas City lawyer Christine L. Schlomann, of Armstrong Teasdale, represents the hospital. She did not return telephone calls seeking comment. Select Medical Corp. spokeswoman Carolyn Curnane also did not return telephone calls. The hospital’s parent company is based in Mechanicsburg, Pa.

Select Specialty said the loss of Medicare and Medicaid funding would put it out of business and 88 employees out of work. It would also be difficult to put many of its patients in alternative care facilities “that will be able to provide the type and level of care they require and that will be close enough for their families to continue to visit them.”

The hospital had sought the TRO to prohibit the department from terminating the agreement until a federal court weighs in on the merits of the hospital’s complaint. The lawsuit, which names Acting Secretary Charles E. Johnson as the defendant, was filed in the U.S. District Court in Kansas City.

The judge ordered the department to “promptly provide to plaintiff Select Specialty a written Statement of Deficiencies” pertaining to the findings from an evaluation conducted March 10-12. Select Specialty is to provide the Centers for Medicare & Medicaid Services, which enforces the Medicare laws and regulations for the federal department, with a written response within a week of its receipt of the findings. Wright said in the order that he will review both the findings and the hospital’s response and then call another hearing to determine whether he should extend the TRO further.

In the meantime, the order bars the federal government from terminating the hospital’s Medicare and Medicaid agreements and from refusing to pay the hospital for services covered under the agreement.

The hospital argues in its lawsuit that its patients are not in danger.

“There has at no time been any allegation by the [Missouri Department of Health and Senior Services] or Defendant that there have been, or that there currently are, any conditions at Select Specialty that pose a risk of serious harm or immediate jeopardy to the health and safety of any of Select Specialty’s patients. Indeed, there have been no allegations of actual harm of any type to any of the hospital’s patients,” the hospital argues in its complaint.

The federal government is represented by Tom Larson, an assistant U.S. attorney in Kansas City. Larson would not comment on the case.

The state Department of Health and Senior Services is the agency responsible for evaluating, or surveying, the hospitals that receive Medicare and Medicaid funding. Following a survey last October, the state agency cited Select Specialty for a deficiency under the category of infection control conditions.

The hospital says in the lawsuit that the deficiency in question was a standard level violation and, as such, doesn’t trigger terminations. But the Centers for Medicare & Medicaid Services raised the deficiency level of this violation to the conditional level without explanation, the hospital alleges. This put Select Specialty on the track toward termination.

A second unannounced survey was conducted, and last month the Centers for Medicare & Medicaid Services told the hospital said it was in compliance with the infection control condition but then cited the hospital for a nursing services condition deficiency.

Select Specialty was to lose its Medicare and Medicaid funding on March 17. The hospital submitted a second plan of correction to CMS, and after a third unannounced survey, CMS on March 13 cited the hospital for being out of compliance in both the nursing services and infection control categories.

The hospital says the federal Department of Health and Human Services violated the Medicare and Medicaid law by failing to comply with the applicable regulations. It also says the survey procedures haven’t been promulgated according to the notice and comment procedures of the Administrative Procedures Act and so their use against the hospital is unlawful.

In December, the St. Louis Business Journal reported that Select Specialty would move its long-term acute hospital to SSM St. Joseph Health Center in St. Charles.

The case is Intensiva Hospital of Greater St. Louis Inc., d/b/a Select Specialty Hospital-St. Louis v. Charles E. Johnson, acting secretary of the U.S. Department of Health and Human Services, 4:09-cv-210.