San Luis Obispo County Losing $55,000 Monthly in Medicare Reimbursement Because Facility Awaits Certification

San Luis Obispo County is losing about $55,000 a month in Medicare reimbursements because the Department of Health Services has not performed a surprise inspection required to certify a county psychiatric facility to participate in the program, the San Luis Obispo Tribune reports. After the county-owned General Hospital closed last June, the county applied to CMS for certification to allow the hospital's psychiatric unit, which now operates as a freestanding facility, to participate in Medicare. Although CMS issues the certification, state agencies conduct the required inspections. The psychiatric facility currently is operating on a state license that allows it to receive some payments through Medi-Cal, but the facility receives a lower reimbursement rate because it lacks federal certification. CMS contacted DHS on Dec. 4 to request that it conduct an inspection of the facility, and the state on Dec. 11 notified the county that an inspection would occur soon. The county asked for more time to prepare for the inspection, which required updating and approving several written policies and procedures, and last week finished preparations for the inspection. Dale Wolff, head of the county Mental Health Services Department, told the county Board of Supervisors that the investigation could occur "any day," the Tribune reports.

Over a year, the losses incurred pending federal certification could amount to about 20% of the facility's $3.5 million annual budget. The county mental health services department last month implemented a hiring freeze and cut outpatient services so it could meet minimum inpatient staffing requirements. A CMS spokesperson said reimbursements could be paid retroactively to last June 13, when the county filed for certification, but Wolff does not expect that to happen (Finucane, San Luis Obispo Tribune, 2/5).