Health department threatens hospital’s Medicare access | Health care/Hospitals

The Louisiana Department of Health has put the operators of a Mandeville psychiatric hospital on notice that they have violated federal hospital standards and put patients’ lives in “immediate jeopardy.”

In a letter dated Jan. 31, the LDH notified Northlake Behavioral Health System that it must fix serious problems or risk losing the ability to collect Medicare and Medicaid reimbursements. For a hospital like Northlake, which predominantly treats poorer patients who rely on federally subsidized health care, losing that ability could force the hospital’s closure.

A Jan. 22 inspection found that Northlake is “out of compliance,” the letter reads. As a result, it says, “your Medicare agreement may be terminated.” Kevin Litten, the LDH’s press secretary, confirmed in a statement that Northlake has been given 90 days to fix its problems or lose its ability to participate in the Medicare program. That period will end in late April.

The letter followed the hospital’s second “immediate jeopardy” sanction in a year, the most serious violation that the federal Centers for Medicare and Medicaid Services issues. It indicates that patients’ have been put at risk of “serious injury, serious harm, serious impairment, or death.”

“It’s not common to get one” such charge, said Alan Levine, a former secretary of the LDH. “To get two is pretty extraordinary.”

Tony Shir, the president of Ness Healthcare, the nonprofit that runs Northlake, says he’s confident the facility has addressed the issues and will soon pass muster with regulators.

“LDH identified a deficiency which was corrected within 24 hours,” he said.

Litten noted, however, that there were “current deficiencies” at Northlake, and the hospital needed to “submit an approved plan of correction” to address them. Shir said that plan had been implemented and the problems were now fixed. 

The January inspection cited in the letter found that, of five mental health technicians at Northlake that state inspectors interviewed, none were aware that they had patients under their care who had to be supervised closely or kept away from other patients in the hospital.

Inspectors also found four instances where fights between patients could have been prevented if the patients had not been left unattended by staff, who failed to “provide the level of observation and restrictions ordered by the licensed practitioners.”

The Times-Picayune, citing records, reported in December that a patient at Northlake with a known history of violent behavior put another patient in a chokehold and held it for more than a minute, until the patient passed out. The violent patient was supposed to be under constant supervision by hospital staff but was left unattended.

Shir, the president, said the newspaper’s reporting painted a “misleading picture” of Northlake.

The incident involving the violent patient occurred in April 2022. A year later, a state inspection found Northlake was failing to properly supervise patients. The January inspection found that Northlake failed in a third inspection in less than two years to maintain prescribed levels of supervision.

The hospital’s failure to monitor aggressive patients, the report found, “endangered all patients at the hospital and created the potential for serious injury,” and put patients in “immediate jeopardy.”

That January inspection also found that the hospital failed to adequately screen staff. Four workers had “disqualifying criminal records” under state law.

In one case, an employee who was fired for hitting a patient in the face was later found to be on parole for armed robbery, a conviction that prohibits employment in health care in Louisiana. The hospital’s CEO, Joe Buckley, acknowledged to regulators that the employee “had a history of violence” and should not have been hired, according to the report.

Another worker had no background check. Two others had convictions for drug distribution or possession.

Safety-net beds

Northlake has a contract for 62 “safety net beds,” part of a state program to care for some of Louisiana’s most vulnerable and at-risk patients, many of whom are uninsured or under judicial commitment orders. To keep those beds, the contract requires that Northlake meet federal safety standards.

The Joint Commission, one of a few organizations that can vouch that those standards are being met, revoked Northlake’s hospital accreditation in April 2022.

Shir says the hospital has since “addressed and rectified every finding in the Joint Commission report.”

More than 18 months ago, state officials warned Northlake that it was in breach of its contract and told the hospital it had to regain accreditation within six months.

That deadline came and went. Since then, the LDH first extended the safety-net contract, then renewed it.

The two charges of immediate jeopardy also put the hospital’s safety-net bed contract at risk, because the state can terminate it if the hospital gets two or more such charges in a year.


A sign instructs patients and their visitors to check in at Northlake Behavioral Health Center in Mandeville. 

Though Northlake received one immediate jeopardy charge last year because it did not have enough trained staff on site and another in January, the contract remains in effect, according to the LDH.

If Northlake is forced to shutter, the LDH noted that three other hospitals house safety net beds. The agency would seek to transfer Northlake’s patients to one of those facilities, Litten said.

‘Operating at a financial loss’

Levine and other experts in hospital administration believe the reason LDH hasn’t terminated its contract with Northlake may be because no other hospital wants to take the safety net beds. That’s because the state doesn’t pay well for them.

The reimbursement rate for safety net beds has historically been far less than what a hospital would get paid to treat a patient who has private insurance. The low safety-net rate may have contributed to Northlake’s persistent problems, Levine said.

Shir acknowledged that the reimbursement rate for safety net beds was not covering costs.

“For the past seven years, we have dedicated ourselves to providing essential services through our OBH (Office of Behavioral Health) program, despite consistently operating at a financial loss for each client served,” he said. “This commitment has been sustained by subsidizing these losses from our other services.”

Despite the problems at Northlake, the LDH increased the rate it pays per safety net patient at the hospital last year, from $552.04 per day to $737.34 per patient per day.

Litten said the increase was meant to bring the hospital’s rate in line with what the facility receives for Medicaid patients.

The LDH may be trying to help Northlake fix its problems instead of shutting it down because, without Northlake, the state would lose the backbone of its safety-net bed program, Levine said.

There are only 94 safety-net beds in the state, and Northlake houses two-thirds of them.

“The state was probably trying to do everything they could to keep the facility open and give them some latitude to solve their problems,” Levine said. “But there’s a point at which you’ve got to bring the hammer down if patients’ rights are being violated. That’s not OK, under any circumstances.”

Until Northlake’s recent increase, its reimbursement rate had been unchanged since 2013, when Northlake took over some of the facilities of Southeast Louisiana Hospital, the state-run facility that shuttered when Gov. Bobby Jindal privatized Louisiana’s charity hospital system.

Levine was shocked to hear Northlake’s rates had been frozen since 2013.

“You’re telling me they haven’t gotten a bump in their rates in 10 years?” said Levine, now CEO of a hospital network in Appalachia. “They’re getting paid way below their costs.” Even with their recent boost, “they’re going to have a lot of catching up to do,” he added.

Four organizations are qualified to certify hospitals like Northlake, and Shir said Northlake has applied for reaccreditation through an organization other than the Joint Commission. He did not name the organization.


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