California hospital to lay off 191 workers as it faces loss of Medicare contract

Stanislaus Surgical Hospital in Modesto, Calif., which is facing a decision from CMS to end its Medicare contract, is laying off 191 employees, according to regulatory documents filed with the state April 15.

The layoffs are effective April 30, the same day CMS said it will terminate the Medicare Provider Agreement with the hospital. 

In a notice dated April 11, the agency said it is terminating the agreement because of the hospital's noncompliance with the Medicare conditions of participation. 

In a Feb. 5 Medicare complaint validation survey, Stanislaus Surgical Hospital was allegedly found out of compliance with requirements for participation in Medicare and Medicaid, "as established by the Social Security Act (Section 1861) and its underlying regulations," the notice said.

CMS' notice followed California Department of Public Health surveys in August and February, which found the hospital was not in compliance with certain Medicare conditions of participation, and focused on the hospital's handling of patient emergencies after surgeries as well as issues with infection prevention and control, sterilization processes, governance and use of certified nurse anesthetists in place of anesthesiologists, according to The Modesto Bee.

Patrick Haley, a spokesperson for the hospital, confirmed the layoffs to Becker's but said the hospital is appealing the CMS decision in hopes of getting it reversed. 

"SSH has a 40-year history of safe patient care and has garnered bipartisan support of the entire political community, both state and federal seeking due process for SSH to engage CMS in meaningful discussion," Mr. Haley said.  

"If this decision is not overturned, 1,800 patients per month, the majority of whom are Medicare or MediCal beneficiaries, will lose access to necessary care in an underserved community that cannot support this patient load. Many of the cited issues have been identified to be false or misleading, and SSH is asking that CMS engage in a reasonable discussion regarding these allegations, and move forward toward a mutually agreeable resolution." 

The hospital aims to retain 15 to 20 workers as it works through the appeal process. 


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