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The Detroit Medical Center's Harper University Hospital has three weeks to pass a federal inspection or lose federal funding that provides 85 percent of the hospital's inpatient revenue, federal officials confirmed. 

The Centers for Medicare and Medicaid Services (CMS) notified the hospital in January that its participation in the federal Medicare program will be ended April 15 if problems with infection control aren't corrected by then.

It's among two DMC hospitals facing an end to receiving aid from the federal program that provides health care for elderly and disabled Americans. Sinai-Grace Hospital will be terminated on Aug. 31, if it doesn't pass an inspection by the deadline, CMS officials told The Detroit News. 

The DMC did not respond Tuesday to a request for comment on the pending Medicare terminations. 

Michigan is among states that bar hospitals banned from Medicare from participating in Medicaid, the health insurance program for mostly low-income people that is funded jointly by the state and federal governments. 

Medicare paid for 36 percent of inpatient hospital days at Harper in 2017, while 42 percent of hospital stays were covered by the Medicaid program. The two programs provide 90 percent of inpatient revenue at Sinai-Grace, with nearly 48 percent paid by Medicare and 42 percent coming from Medicaid, said Allan Baumgarten, a Minneapolis health care consultant who has studied the Michigan hospital market for more than two decades. 

The loss of federal revenue would be deeply felt by the health system owned by Dallas, Texas-based Tenet Healthcare, a for-profit hospital chain. Nearly half of the DMC's hospital revenues in 2017 came from Harper University Hospital and Sinai-Grace, Baumgarten said.

"Obviously this is a very serious matter, especially getting so close to the deadline," he said. 

Medicare termination is rare in America, where the number of hospitals that lost federal aid has decreased since 2015 when nine hospitals lost their funding. Two hospitals in the country were terminated in 2018, and three in 2017. 

Federal officials sent preliminary letters of determination to Harper University Hospital and DMC's Detroit Receiving Hospital on Jan. 15, after the hospitals failed to meet federal requirements for "physical environment" during inspections in December.

An inspection at Receiving on March 7 found the hospital in compliance with federal standards, and termination was rescinded on March 22, CMS confirmed. 

The Michigan Department of Licensing and Regulatory Affairs conducted the Dec. 13 inspections on behalf of CMS after three cardiologists and the top doctor at DMC Heart Hospital claimed they were terminated from their management roles in retaliation for complaints they made about quality-of-care issues. Heart Hospital adjoins Harper and shares many of its facilities and services. 

In a lawsuit filed Monday in Detroit's U.S. District Court, cardiologists Dr. Mahir Elder and Dr. Amir Kaki said they were fired after complaining about dirty surgical instruments and other problems at DMC hospitals — including at last three unnecessary surgeries that resulted in patient deaths.  

"Any suggestion that these leadership transitions were made for reasons other than violations of our Standards of Conduct is false,” the DMC said in a Monday statement in response to the cardiologists' lawsuit. 

The inspection at Harper found flying insects in an intensive care unit, improperly attired surgical personnel and lapses in sterile processing of surgical instruments. 

At Receiving, inspectors discovered the hospital had discontinued surveillance of most surgical site infections because of staff cuts in 2018, as well as other infection control problems.  

Sinai-Grace spent most of 2018 under threat of Medicare termination over building problems and quality of nursing care, but recovered its "deemed" status in September after passing inspections. 

Sinai-Grace was inspected again in January after The Detroit News reported the facility was unable to treat a heart attack patient during a power outage on Nov. 21, 2018, because the cardiac catheterization lab wasn't operational. The patient died after being transferred to another hospital.  

A six-month Detroit News investigation published in August 2016 found an 11-year history of problems with dirty surgical instruments at five hospitals on the DMC's Midtown campus.

Harper and Receiving, as well as Hutzel Women's Hospital and DMC Children's Hospital of Michigan, were threatened with the loss of Medicare funding over problems with dirty surgical instruments. Their "deemed" status was restored after improvements were made.  

The DMC's current problems come at a time when hospitals across the country are concerned about efforts by the Trump administration to reduce funding for Medicare and Medicaid and unravel the federal Affordable Care Act.

Michigan is among the states that have expanded Medicaid under the Affordable Care Act, resulting in millions of dollars in revenue paid to hospitals, like those in Detroit, that serve large populations of low-income or poor patients. 

A legal filing Monday by the U.S. Justice Department in the U.S. Court of Appeals for the 5th Circuit case on the Affordable Care Act disclosed the Trump administration's intention to back a complete invalidation of the health care law, Baumgarten noted that Trump's 2020 budget proposed substantial cuts to both Medicare and Medicaid, although the reductions are unlikely to be made by Congress.  

"A system like the Detroit Medical Center, which has prospered because of relatively good times with Medicare and Medicaid in the last five years, would now seem relatively vulnerable," Baumgarten said.

kbouffard@detroitnews.com

 

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