Update, July 17: The federal Medicare program said Monday that it is moving forward with plans to cut off funding for heart transplants at Baylor St. Luke’s Medical Center on Aug. 17. In a letter to the hospital, the Centers for Medicare and Medicaid Services gave the hospital until the end of the day Tuesday to notify Medicare beneficiaries awaiting hearts at St. Luke’s that the program would no longer be allowed to bill the federal health plan for their care. A St. Luke’s spokeswoman said the hospital has not yet decided if it will appeal. She said the hospital would notify patients and help any who wish to transfer, as required.

The federal Medicare program informed Baylor St. Luke’s Medical Center on Friday that it would cut off funding to its heart transplant program in August, saying the Houston hospital has not done enough to fix shortcomings that endanger patients.

The decision by the Centers for Medicare and Medicaid Services is a devastating blow to what was once one of the nation’s most renowned heart transplant programs. Losing Medicare’s seal of approval on Aug. 17 would threaten its viability, experts say, depriving it of an essential source of funding. The termination could trigger private insurance companies to follow suit and force all 88 patients on the program’s waiting list to either pay out of pocket or, more likely, transfer to another hospital.

Losing Medicare funding is not unprecedented, but it is rare. St. Luke’s can appeal the termination, but that will not freeze the process, according to Medicare rules.

CMS’s decision comes just weeks after an investigation by ProPublica and the Houston Chronicle found that the program performed an outsized number of transplants resulting in deaths and has lost several top physicians in recent years. Multiple St. Luke’s doctors raised concerns about errors during operations and serious surgical complications after Dr. Jeffrey Morgan took over as the program’s top surgeon in 2016, and a few cardiologists began referring some of their patients to other hospitals for transplants.

Following the report, St. Luke’s temporarily suspended the heart transplant program in order to review the cases of two patients who died in May after receiving transplants earlier in the year. All told, three of the nine patients who received new hearts this year have died; nationally more than 90 percent of heart transplant recipients survive at least a year.

A week ago, St. Luke’s said it was reopening the program after finding no “systemic issues related to the quality of the program.” Nonetheless, it said it was reorganizing its transplant surgery team, refining the criteria for which patients it would accept for heart transplants, and making other improvements to strengthen the program.

Medicare officials, however, wrote that they are not satisfied that the program has taken steps to ensure the safety of its patients.

In a statement, St. Luke’s said it looks forward to discussing CMS’ concerns with agency officials. The hospital said it believes it is eligible to take further corrective steps, including a systems improvement agreement, “which would provide a long-term path forward for our program.”

“Our unwavering focus is always to ensure our patients receive the best possible medical care, and in ways that reflect our core values of reverence, integrity, compassion, and excellence,” the hospital said.

Systems improvement agreements, when they occur, are usually first offered by CMS, rather than requested by a hospital. No such agreement was offered in the CMS letter.

Alexander Aussi, a San Antonio-based consultant who specializes in helping transplant programs satisfy regulatory requirements, said he and other transplant experts were surprised when St. Luke’s announced it was reactivating the heart program after only two weeks. Given its struggles in recent years, he believes leaders should have taken more time to make changes.

“They could have dealt with this better in my opinion,” Aussi said. “They should have acknowledged their problems more fully, kept the program inactive longer and fixed it all before restarting. Now it seems they are paying the price for that decision.”

Nelly Reed, whose husband, Daniel, is waiting for a heart at St. Luke’s, was relieved last week when a hospital staffer contacted the family to let them know the program was being reactivated. Daniel Reed, 47, is on Medicare by virtue of his disability.

“Oh God,” Nelly Reed said upon learning about Medicare’s decision from a reporter. “Here comes that black cloud again.”

The Reeds traveled to Houston earlier this month from their home, six hours away in the Rio Grande Valley, to search for a short-term apartment where Nelly can stay once Daniel receives a new heart. Now, she said, they will ask a doctor about transferring to one of the two other Houston hospitals with heart transplant programs.

CMS first cited the heart transplant program in January for its significantly worse-than-expected outcomes and threatened to cut off Medicare funds. St. Luke’s responded, saying the problems had been fixed and asking for reconsideration based on mitigating factors.

But in a letter sent Friday, Medicare rejected that request.

“It could not be confirmed, from the documentation submitted, that the program implemented improvements in surgical processes or implemented procedures to minimize” the amount of time patients spent on heart-lung bypass machines during transplant operations, wrote David Wright, director of the CMS Quality and Safety Oversight Group. “There was no documentation of program oversight to ensure that any improvements were implemented and sustained.”

Wright’s letter details, for the first time publicly, what the hospital said was wrong with its program, resulting in twice as many deaths as expected within a year of transplants performed from January 2014 to June 2016. The hospital cited three root causes, including intraoperative surgical processes, essentially what happens during surgery.

Although those problems were known in 2016, Medicare said as recently as this year, “the program continued to identify the need to improve intraoperative surgical methods” and reduce the amount of time patients spend on the heart-lung bypass machine, which increases the risk of complications such as bleeding.

Medicare’s conclusion mirrors findings reported by ProPublica and the Chronicle. Multiple heart transplant recipients have suffered unusual complications since 2016, including two who had major veins stitched closed during surgery, according to numerous sources. Another patient’s heart transplant failed this year after operating-room equipment malfunctioned during a key stage of surgery.

St. Luke’s told Medicare that it had improved its process for selecting patients for its transplant waiting list and donor hearts. The documentation it provided, however, “did not explain how the program implemented improvements in this area and how these improvements led to improved outcomes,” Wright wrote.

For weeks, officials at St. Luke’s and its affiliated Baylor College of Medicine have defended the program, saying they had made improvements following a string of patient deaths in 2015. Officials said the program’s one-year survival rate after heart transplants had reached 94 percent in 2016 and 2017 under Morgan’s leadership.

Even after reactivating the program, St. Luke’s was continuing its efforts to fill several key positions related to heart transplants, including a vice president to oversee all of the hospital’s transplant operations. The hospital also has posted openings for several nursing positions in the heart program, and it recently hired a new administrator to oversee heart and lung transplants.

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Mike Hixenbaugh is an investigative reporter at the Houston Chronicle. Email him at [email protected] and follow him on Twitter at @Mike_Hixenbaugh.

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