December 6, 2023

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United Memorial Medical Center loses Medicare contract over safety, health violations

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United Memorial Medical Center, a hospital system with four locations in Houston, will lose its contracts with Medicare after several inspections found health and safety violations from failing to screen staff for COVID-19 to rusted equipment to cockroaches in the operating room, according to the Centers for Medicare and Medicaid Services.

The centers, which oversee the government health insurance for the elderly, said they will terminate the contract with United Memorial Medical Center on Dec. 11, meaning Medicare will no longer cover patients who use the hospital system. That likely will cost United Memorial millions of dollars in reimbursements from and potentially force the closure of the hospital system.

Termination of contracts for Medicaid, the government health insurance for the poor, typically follows Medicare termination, a spokesperson for Centers for Medicare and Medicaid said. No hospital can survive for long without revenue from Medicare and Medicaid, said Vivian Ho, a health economist at Rice University.

“It’s often half of a hospital’s revenue, because elderly and lower-income people are most vulnerable to health problems,” Ho said. “It can also cause private insurers to terminate contracts, because insurers don’t want their customers going to substandard facilities for care.”

United Memorial Medical Center did not respond to requests for comment.

The Centers for Medicare and Medicaid Services conducted four inspections between Jan. 8 and Sept. 10 at the hospital’s locations. In July, the agency sent a notice of a termination that would go into effect Sept. 13 if the hospital failed to fix the deficiencies. The federal agency extended the termination twice, according to Centers for Medicare and Medicaid Services.

The agency sent its final termination letter in late November stating that patients’ health and safety are in “immediate jeopardy.”

“Involuntary termination of a provider agreement is generally a last resort after all other attempts to remedy the deficiencies at a facility have been exhausted,” a spokesperson for the Centers for Medicare and Medicaid Services. “In this instance, CMS has found that UMMC — despite proposed corrective actions — is out of compliance with CMS’ basic health and safety requirements.”

The centers’ inspections found rusted equipment, such as operating tables and stools, and cockroaches in the operating rooms. More than 90 percent of the 35 nurses contracted from a staffing agency were missing at least one required certification. Seven of 24 hospital-employed intensive care unit registered nurses, or 29 percent did not meet all of the requirements for their position.

The nursing directors of UMMC North, located north of Beltway 8, and the Sugar Land location did not meet the educational requirements, including holding a master’s degree. The main campus, in Northside Houston, did not have a director of nurses or an emergency department nurse director.

The hospital also was not screening staff for COVID-19, according to a report filed in January by the Centers for Medicare and Medicaid Services. None of the follow-up reports indicated that this issue was addressed.

“There are not any newly created or updated policy and procedures regarding COVID-19 and the need for the hospital to screen staff” before their assigned shifts, one nurse said in an interview with CMS.

The loss of Medicare and Medicaid coverage often results in hospital closures, experts said. The end of the government programs is often followed by the exit of private insurers, many of which won’t consider hospitals without Medicare contracts for their networks. Medicare coverage indicates that the hospitals meet standards of care, experts said.

It’s rare for the Centers for Medicare and Medicaid Services to terminate contracts with hospitals, which suggests that deficiencies at United Memorial Medical Center were serious, said Jessica Mantel, co-director of the Health Law & Policy Institute at the University of Houston Law Center.

“CMS does not take this step lightly,” Mantel said. “Communities rely very heavily on their hospitals. CMS will only take the step of terminating a hospital’s provider agreement if it has really lost faith in the hospital’s ability to make those corrective actions.”

Losing Medicare and potentially Medicaid coverage can have a tremendous impact on access to care, experts said, particularly in poorer communities more likely to depend on the government health care programs. The hospital’s flagship location is in a zip code where the median household income is $36,000, about half the median income of the Houston metropolitan area, according to census data.

The decision of the Centers for Medicare and Medicaid Services can still be overturned. The hospital has until Jan. 24 to request a hearing before an administrative law judge of the U.S. Department of Health and Human Services departmental appeal board.

If there aren’t nearby alternatives, sometimes community leaders will rally to keep a hospital open, Mantel said. That’s what happened with St. Joseph Medical Center in 2015. U.S. Rep. Sheila Jackson Lee, D-Houston, and Texas Rep. Garnet Coleman, D-Houston, assisted in the effort to negotiate a solution with the Centers for Medicare and Medicaid Services to save Houston’s only downtown hospital.

But United Memorial Medical Center, has had other problems. Recently, its chief medical officer prescribed patients with anti-parasite medication ivermectin to treat COVID despite warnings from the FDA and CDC that drug was ineffective against the virus and potentially dangerous. It also filed for Chapter 11 bankruptcy in 2005.

If the hospital decides not to appeal, and the termination goes through, Medicare and Medicaid will stop reimbursing the hospital for patients admitted after Dec 11. For patients admitted prior to that date, payment may continue to be made for up to 30 days after the services were performed.

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