Chicago psych hospital may close after CMS pulls Medicare funding

A psychiatric hospital in Chicago is in imminent danger of closing after federal officials pulled its Medicare funding and state officials threatened to revoke its license, according to the Chicago Tribune.

Advertisement

Chicago Lakeshore Hospital lost its Medicare and Medicaid funding Dec. 23 after a CMS inspection found deficiencies “so serious they constitute an immediate threat to patient health and safety.” 

Hospital officials told a judge in late December that without access to federal funding it will “undoubtedly close.” 

Most patients in the facility receive Medicare and Medicaid benefits, the hospital said.

Chicago Lakeshore administrators said they are working to move all Medicare and Medicaid patients out of the hospital by the end of January.

State health officials said they expect to initiate a proceeding to revoke Chicago Lakeshore’s license “imminently,” due to the hospital’s “continued failure to comply with regulations,” according to the Tribune.

The revocation of its federal funding comes as the psychiatric hospital also faces allegations of physicial and sexual abuse of youth patients.

A Cook County public guardian sued the hospital last month, alleging youth patients were physically and sexually abused by staff and fellow patients. 

“Our hospital has been a last resort for highly acute patients with several failed placements and nowhere else to go,” hospital administrators told the Tribune. “Quality patient care has always been a top priority for our dedicated staff.”

More articles on healthcare finance:

Southwest Tennessee has 1 rural hospital after 3 others close
Banner Health workers strike $500K deal with advisory firm
North Carolina hospital secures loan to pay employees

Advertisement

Next Up in Financial Management

  • Healthcare leaders are often expected to compartmentalize emotion to make difficult decisions, drive results, and maintain operational focus. For many years, I led…

  • Chicago-based CommonSpirit recorded an operating income of $2 million (0% operating margin) in the second quarter of fiscal 2026, down…

  • Amy Assenmacher, RN, senior vice president of revenue cycle at Grand Rapids, Mich.-based Corewell Health, is confident that healthcare is…

Advertisement

Comments are closed.