A Chicago psychiatric hospital just two days from losing federal funding, potentially forcing it to shut down, will remain open for now, following a judge’s ruling Thursday.

Federal officials had told Aurora Chicago Lakeshore Hospital they would terminate its Medicare agreement on Saturday after a November inspection found the hospital could not ensure its patients were free from sexual and physical abuse and did not have adequate policies and procedures in place to investigate abuse allegations.

Officials learned of the allegations from separate investigations by ProPublica Illinois and the Chicago Tribune.

In court filings, Lakeshore said that terminating the federal agreement would make the hospital ineligible for Medicare and Medicaid funding, which makes up more than 90 percent of the hospital’s revenue, and would force it to lay off employees and close its doors.

Lakeshore attorneys on Thursday asked U.S. District Judge Sharon Johnson Coleman for a temporary restraining order to stop federal authorities from pulling the hospital’s funding, saying it had corrected many of the problems and has not yet had an opportunity to appeal the decision.

Coleman gave the government and the hospital a tight schedule to make arguments and said both should consider how to accommodate patients if she denies the injunction request.

Both sides are expected back in court Jan. 2.

Lakeshore, which argued in court filings that it had conducted complete investigations into the abuse allegations, said federal officials set the hospital on a “disastrous course” when they moved to terminate its Medicare agreement.

The hospital filed an appeal with federal officials but was told the earliest the appeal could be heard was February, “at which point Aurora will already be closed and cease to exist,” Lakeshore said in its filings.

Questions about the hospital’s future have swirled for weeks. The American Civil Liberties Union of Illinois took the state’s Department of Children and Family Services to court to remove all children in its care from the hospital. DCFS, which has agreed to stop sending children to the hospital, had relied heavily on Lakeshore to treat children who needed psychiatric treatment, including some who had been turned away from other hospitals and some who remained at the hospital after being cleared for discharge because DCFS couldn’t find more appropriate placements for them.

Filed under: