Amid serious violations at Washington’s private psychiatric hospitals, a regulator remained on the sidelines

By Daniel Gilbert, The Seattle Times, Dec 30, 2019.

The patient had been admitted to Smokey Point Behavioral Hospital on a 90-day involuntary commitment order. But when his health-insurance plan sent a team to check on him, some 20 days into his stay, he was gone.

Representatives of the Community Health Plan of Washington, which provides health services for Medicaid clients, went to the Marysville psychiatric hospital with concerns after reading a Seattle Times investigation of Smokey Point and its parent company, US HealthVest, published three days earlier. Their concerns mounted as they pressed hospital staff to explain why the man, who also suffered from a spinal-cord defect, had been released earlier that day to a motel with $20 and stitches from being assaulted at Smokey Point, according to records reviewed by The Seattle Times.

The health plan’s conclusion: The patient had been “turfed to the streets.” Hospital staff had made what health plan officials said, “seemed to be a deliberate effort to hide the truth.” Richard Kresch, US HealthVest’s chief executive, disputed this assessment in an email to The Times, saying the patient “stabilized after 20 days of treatment” and was “transported to secure housing and offered outpatient aftercare.”

The health plan, though, decided to temporarily stop sending patients to Smokey Point. Then it called the state agency it works for, the Washington state Health Care Authority.

The HCA covers health-care costs for patients insured by Medicaid, contracting with Community Health and other private insurers to manage their care. The state agency has the power to audit individual doctors and facilities that receive Medicaid funds, and to restrict them from the taxpayer-funded program for serious violations. But with Smokey Point and other private mental-health hospitals it has remained almost entirely on the sidelines, an examination by The Seattle Times has found.

Over five years, Medicaid and other state payments to five private psychiatric hospitals nearly tripled, totaling almost $67 million in 2018, according to a Times analysis of HCA data. In more than a dozen inspections since 2016, state and federal regulators found violations at four private psychiatric hospitals that were serious enough to warrant termination from Medicare, though they stopped short of doing so.

While the same set of standards applies to Medicare and Medicaid, HCA officials said they didn’t know about these violations found by the Washington state Department of Health and the Centers for Medicare and Medicaid Services. There wasn’t a protocol to notify HCA, the state agencies said.

“It certainly appears that we have a place in our system that we need to do an improvement,” MaryAnne Lindeblad, HCA’s Medicaid director, said in an interview. “You’ve raised an issue to us that we are going to solve.” (Medicare covers health care for seniors and certain others. Medicaid covers people with low incomes.)

HCA’s agreements with the psychiatric hospitals participating in Medicaid include the right to conduct audits, records show, but it hasn’t done any since at least 2014, officials confirmed.

Michael Brown, an attorney in HCA’s legal-affairs division, said it has agreements with some 40,000 providers and that its audit staff would only look into whether they are billing appropriately. As for safety violations, “If it’s so far below the standard of care for the individual patient, then that would be an opportunity for them to go and look at it,” he said, “to see if there are any irregularities or abnormalities in how the billing is occurring.”

HCA officials said they hadn’t done any audits because they hadn’t received any complaints that rose to a level that would justify such an action. But they have been aware of complaints about the hospitals, records show.

In April, King County officials complained to HCA about their ongoing concerns with BHC Fairfax Hospital in Kirkland. When patients who voluntarily checked in to the psychiatric hospital would ask to be released, Fairfax would often request that county officials evaluate them for involuntary commitment — only for the officials to find no grounds to justify detaining patients.

Over four years, county officials found no grounds to commit patients in nearly 70% of evaluations requested by Fairfax, making it an outlier among other King County hospitals, an investigation by The Times found. Fairfax has said it requests such evaluations “solely in the interests of the patient and in conformity with the law.”

Charissa Fotinos, HCA’s deputy chief medical officer, referred the county’s complaint to the Department of Health. The case remained open as of earlier this month, records show.

Complicating HCA’s work is a massive bureaucratic reorganization, which took effect in 2018, to integrate physical, mental health and substance-abuse services under one agency’s roof. The HCA took over mental-health programs previously overseen by the Department of Social and Health Services (DSHS), while the Department of Health (DOH) became the main regulator in charge of licensing hospitals to operate.

HCA’s role as the state Medicaid agency hasn’t changed, but officials indicated that they have generally left the job of policing the quality of care to others. DSHS and DOH have been responsible for ensuring that hospitals complied with licensing standards. County-based behavioral health organizations “were responsible for placement and ensuring that their clients’ care was meeting the standard,” an HCA spokeswoman said. While the HCA would have cut the checks for Medicaid payments, she said, “we ultimately would not have had a role in that individual’s care or payment review.”

Washington state has replaced the county organizations with a new system, contracting out the work of managing care for Medicaid clients to five private health insurers to decide what to cover. Of the five insurance plans, four are for-profit and one, Community Health, is a nonprofit.

Lindeblad said HCA directed the five health plans to conduct site visits of Smokey Point after The Times’ investigation in August. When asked about the results of these inspections three months later, HCA officials said they hadn’t found anything alarming.

“They were for the most part satisfied with the care that was being provided,” Lindeblad said of the health plans.

Brown, the HCA attorney, said the health plans had verified Smokey Point was “meeting the standard of care,” and “Overall, we felt comfortable with that.”

They didn’t mention that Community Health had been sufficiently concerned to temporarily stop authorizing patients to get care at Smokey Point.

The HCA spokeswoman said Lindeblad was speaking “about the overall situation and did not intentionally omit anything.” She added, “These facilities are an integral part of the community behavioral health system — we need them to help ensure access to care for people, so they don’t end up in less appropriate settings, such as jail or homelessness.”

A spokeswoman for Community Health declined to comment.

On Aug. 28, the Community Health team visited Smokey Point following The Times’ investigation, which had found a pattern of serious problems at the hospital, from accepting patients whose medical needs it couldn’t handle to directing staffers to fill in missing or incomplete patient records.

As the Community Health team reviewed charts of their clients, a Smokey Point staff member was “frequently in the room to ‘help’ us find anything that we needed,” a manager wrote in a complaint to DOH. “But he seemed to be there to monitor our review.”

Senior hospital executives also came and went frequently to “find additional information that was not in the chart and ‘maybe not filed yet,’” according to Community Health complaint.

The insurer’s findings were not all bad. A teenage girl told Community Health staff that “she was happy with the care and that she feels she is getting better.” The health plan’s team noticed, though, that this wasn’t the girl’s first stay at Smokey Point. She had been discharged with no outpatient follow-up appointment scheduled, and readmitted to Smokey Point the next morning. In reviewing her latest records, “we found the same inadequate discharge plan,” a Community Health manager wrote.

In another patient’s records, the Community Health team found a therapy note that began and ended in black ink, with the rest written in blue ink. “Based on the findings in the Seattle Times article, I found this document to be suspicious,” Community Health’s director of utilization management wrote in a complaint to DOH.

The most concerning condition, Community Health wrote, involved Smokey Point’s early release of the patient on a 90-day involuntary commitment order. Under state law, a hospital can lift the court order if an administrator determines the patient doesn’t need active psychiatric treatment — but still has to coordinate with the organization managing the patient’s care.

In reviewing the patient’s medical chart, Community Health found that the patient had been refusing medication for several days. He had also been injured in an assault and taken to an emergency room, where he received stitches, according to the complaint. The health plan’s team found no rationale for lifting the court order. Though hospital staff said that they had notified the state of plans to discharge the patient, they couldn’t produce any record of this. Eventually, Smokey Point’s chief executive explained the lack of documentation by saying “they had been given conflicting information on if notification was required or not.”

Kresch, US HealthVest’s CEO, said the patient “was discharged with notice to all required and full documentation in the chart.” He added that Community Health resumed referring patients to Smokey Point after a week.

A DOH spokeswoman said it investigated Community Health’s complaint, issued a violation report and approved a plan of corrections from Smokey Point, which has been under a broader corrective action plan since June.

As for the patient whose involuntary commitment order was lifted, Community Health tried to contact him the next day.

Its staff confirmed that he hadn’t checked in to the motel. He hadn’t been to the outpatient walk-in clinic where he was to have his prescription filled. At the time Community Health filed its complaint with DOH two days later, they were still trying to contact the patient.

Article has been updated on Jan. 09, 2020