N.C. hospital loses CMS eligibility over drug and other errors

May 12, 2008

Drug errors and other lapses in patient care sends a North Carolina hospital into a tailspin

"The next major medical center is a good 50 miles away," said Fred Eckel, executive director of the North Carolina Association of Pharmacists. "Losing CMS certification creates a real problem for patients."

Just five hospitals nationwide lost CMS certification last year, according to the agency. One has regained certification, two closed, and two remain without certification.

HRMC hired outside consultants, the Compass Group, to salvage the hospital and restore CMS certification. The hospital board of directors has also discussed selling the county institution.

"We have a pretty good relationship with North Carolina Medicaid," said Jay Campbell, executive director of the state board of pharmacy. "If problems they find had to do with pharmacy, we would be notified, which we were. One of our investigators is still in the middle of her investigation at Haywood. But you have to have serious problems in more than one department to get Medicaid acting this strongly."

Hospital's problems

An earlier inspection of HRMC in January had found that it was out of compliance with four conditions of participation in the Medicaid program. Problem areas included the governing body (board of directors), quality assessment and performance improvement, nursing services, and pharmaceutical services.

The second February inspection found that HRMC was still out of compliance in all four areas. Inspectors found additional deficiencies in patient rights, infection control, and respiratory care services. CMS followed DFS recommendation and decertified the hospital. Medicare and Medicaid accounted for more than half of HRMC's patient volume and nearly 70% of hospital revenue.

Within days, Blue Cross Blue Shield, UnitedHealthcare, and at least one other private payer suspended HRMC from their network or allowed the facility to withdraw. By late March, HMRC's daily census was down to 11 patients.

The decision to pull CMS funding followed physician complaints in late 2007 about multiple medication administration errors. The complaint included a patient death associated with an early and unordered termination of a Xigris (drotrecogin alfa, Lilly) infusion. A physician was escorted out of the hospital by security staff in early December and fired. She has sued the hospital for wrongful termination and conspiracy to cover up patient care deficiencies.

Haywood has also lost at least six top executives. Compass Group consultants have moved into top positions. Hospital spokeswoman Robin Tindall-Taylor did not respond to questions about the HRMC pharmacy director's involvement in these incidents.

Corrective action

The new leadership team has created a 12-point plan to address surveyor concerns and improve patient care. How well that new plan is working remains to be seen. Joint Commission staged a surprise survey in March. The survey report had not been released by deadline. In early April, the hospital notified CMS that it was ready for reinspection. If HRMC passes the unannounced inspection, it will enter a period of "reasonable assurance" that lasts up to four months. If it passes a second unannounced inspection during that period, CMS certification could be restored. Once federal funding returns, private payers usually follow.