Chicago psych hospital to lay off 275 after federal funding ended

A Chicago psychiatric hospital will lay off 275 employees after losing its Medicare funding last month, according to a notice filed with the state of Illinois.

Chicago Lakeshore Hospital said the layoffs are permanent, and the first employees were let go Jan. 3.

The hospital cited the loss of federal funding as the reason for the layoffs, according to The Chicago Tribune.

The psychiatric 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." 

The layoffs and funding issues come as the hospital also faces allegations of physicial and sexual abuse of its 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. 

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