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Chicago Psychiatric Hospital Will Lose Federal Money, and Its License Is Threatened After Allegations of Abuse

The Centers for Medicare and Medicaid Services terminated an agreement and accompanying federal funding for Chicago Lakeshore Hospital, and the Illinois Department of Public Health is moving forward with plans to revoke the facility’s license.

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Update, Jan. 27, 2020: The Illinois Department of Public Health on Monday filed a notice to revoke Chicago Lakeshore Hospital’s license based on the hospital’s “substantial and continued failure” to comply with licensing requirements.

The hospital has 10 days to request a hearing to show why its license should not be revoked.

A hospital spokesman said Monday afternoon that Lakeshore had not yet been officially notified of the move and could not comment.

After more than a year of lawsuits and government extensions, federal authorities this week ended their Medicare agreement with a Chicago psychiatric hospital plagued by allegations of abuse and safety violations. The Illinois Department of Public Health said Thursday it is moving forward with plans to revoke the hospital’s license.

The Centers for Medicare and Medicaid Services terminated the agreement and accompanying federal funding for Chicago Lakeshore Hospital on Monday after seven inspections since July 2018 found deficiencies that threatened the health and safety of the patients, federal records show.

The federal government will continue payment for up to 30 days for patients admitted to the hospital in Chicago’s Uptown neighborhood before midnight Monday, a federal spokesman said. Hospital officials said Monday that Lakeshore, formerly known as Aurora Chicago Lakeshore Hospital, will remain open as they work with authorities and examine their options.

Meanwhile, IDPH has taken steps with the Illinois Hospital Licensing Board to begin an administrative proceeding to “revoke Chicago Lakeshore’s state license imminently,” department spokesman Cris Martinez said Thursday.

“Chicago Lakeshore Hospital has demonstrated a continued failure to comply with regulations,” Martinez said.

Gov. J.B. Pritzker’s office said Thursday that IDPH worked with the hospital to take corrective action, but that the facility has not only failed to comply with regulations but also “jeopardized patient health and safety,” Pritzker press secretary Jordan Abudayyeh said. The governor’s office is working with state agencies to “ensure patients can receive the care they need without interruptions,” she said.

Payments from Medicaid, a joint state and federal program, also were terminated. Lakeshore officials have previously said the hospital will be forced to close if its Medicare and Medicaid payments were ended. Last year, more than 80% of its patients were insured through one of the two programs, court records show. Those patients and hospital employees would suffer, Lakeshore officials have argued, as the facility is one of the largest behavioral health providers in the state, serving about 5,000 patients annually.

In anticipation of the termination of payments, officials began to halt Medicaid admissions to Lakeshore earlier this month. There are currently about 40 Medicaid patients there, who will be discharged or transferred, according to a spokesman for the Illinois Department of Human Services.

Last month, IDPH inspectors, acting on behalf of federal authorities, found that Lakeshore had failed to implement proper safety precautions after a suicidal patient notified a nurse she wanted to hurt herself, according to records. The patient was later found unresponsive with a sheet wrapped around her neck. The nursing staff was able to revive her, records show, and she was transferred to another hospital. Inspectors also cited the hospital for failing to monitor a patient who was known to sexually act out and who allegedly abused another patient.

Lakeshore officials said in their statement Monday that the hospital has a decadeslong history of providing critical mental health services to patients, especially those with “nowhere else to go.”

“Quality patient care has always been a top priority for our dedicated staff,” the statement read. “In light of all that has been taken out of context, distorted, or exaggerated, it has been difficult over the last year to give justice to the great care Chicago Lakeshore Hospital provides every day, every work shift to a population of patients who have been forgotten by so many before landing at our door.”

Hospital officials said they will continue to provide services for their patients and work with state and federal authorities over the next month to safely transition all Medicare and Medicaid patients out of the facility.

ProPublica Illinois and the Chicago Tribune last year separately reported troubling conditions at the hospital, including allegations of sexual and physical abuse against children in the state’s child welfare system. At the time, the Illinois Department of Children and Family Services relied heavily on the psychiatric hospital but, following the news reports and subsequent pressure from lawmakers and the American Civil Liberties Union of Illinois, the agency late last year stopped sending children in its care there.

Over the past 15 months, Lakeshore has filed multiple lawsuits and administrative appeals in an attempt to halt the Medicare termination initially set to take effect August 2018. U.S. District Judge Sharon Johnson Coleman last December approved the hospital’s request to keep federal officials from immediately pulling funding, but Coleman vacated that order last week. She also denied the hospital’s latest effort to avert the termination.

In her Dec. 19 ruling, Coleman wrote that federal officials have offered Lakeshore numerous opportunities to correct the deficiencies. Officials were not required to to give the hospital yet another opportunity, she wrote, “especially in light of (the hospital’s) inability to provide a safer environment for its young patients.”

Also last week, the Cook County public guardian filed a lawsuit that called Lakeshore a “hospital of horrors” where children as young as 7 had been abused.

In response to the Medicare termination, a spokeswoman for Blue Cross and Blue Shield of Illinois said the insurer had removed the hospital from its networks on Tuesday. In recent court filings, Lakeshore said Blue Cross was the hospital’s third-largest source of revenue in 2018, at around 9%, after Medicaid and Medicare.

Lakeshore can file an administrative appeal with federal authorities, but the termination will remain in place during that time. Federal regulations also allow the hospital to reapply for its Medicare certification, but it must provide “reasonable assurance” that the cause for the termination no longer exists and will not recur.

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Duaa Eldeib is currently investigating issues related to health inequities and race. Send tips and documents her way.

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