County Files Suit to Block Funds Cutoff at Hillcrest

San Diego County filed suit in U. S. District Court Tuesday seeking to block a decision by the federal Department of Health and Human Services (HHS) to cut off reimbursements for Medicare patients at the Hillcrest mental health hospital.

The revocation of the county’s right to receive Medicare funds, which followed harsh criticism of the Hillcrest facility by local, state and federal officials, would be in effect for three years, beginning Monday. It was issued because of what the federal government described as “serious violations” that held a “potential for patient harm” at the hospital. Among the violations mentioned were inadequate care for Medicare recipients and the premature release of a patient who later committed suicide.

U. S. District Judge William B. Enright will hold a hearing late this week on the county’s request for a temporary restraining order to block the federal government’s action until a ruling by an administrative law judge.

Robert Lerner, a spokesman for the county, said a hearing before the administrative law judge is the only avenue available to overturn the federal government’s ruling. The 62-bed Hillcrest facility, which administers acute psychiatric care to about 3,000 patients annually, was scheduled to receive about $1 million, representing 12.3% of its operating budget, in Medicare reimbursements during the current fiscal year.

Also listed as a plaintiff in the suit is Richard J. Thomson, a Superior Court-appointed conservator for two patients being treated at Hillcrest. County officials have said that most of the Hillcrest patients, 90% of whom are referred to the facility by local law-enforcement agencies, cannot be treated at other local hospitals.

“Hillcrest is the hospital of last resort,” Lerner said. “If Hillcrest were forced to close, these people, many of whom are young and extremely violent, would be out on the streets. Most of the patients are people that no other hospitals want to treat.”

Lerner said the hospital will not immediately close if the Medicare funds are lost. “We’d operate as long as we could,” he said. “But the county’s budget could only absorb so much.”

Paul Eckert, chairman of the San Diego County Board of Supervisors, said last week that the federal government’s action “may jeopardize the continued operation of the only public facility that provides acute and essential psychiatric care to a very difficult segment of our society.”

Hillcrest is the first hospital in the nation to have its Medicare eligibility revoked since new, stricter enforcement of federal regulations went into effect in April. James F. Patton, director of the health care division of the Department of Health and Human Services’ inspector general’s office and a defendant in the suit, said in a letter informing the county of the revocation that changes in operations at Hillcrest “have not yet been translated into acceptable psychiatric care for the patients.”

Patton also said Hillcrest had demonstrated “an unwillingness or lack of ability substantially to comply with these obligations.” The federal government’s review of Hillcrest, based on reviews of 21 patient records, was completed in June, 1985, and county officials have claimed that the quality of care at the hospital has improved dramatically since then.

In the lawsuit, the county alleges that the federal government violated the constitutional rights of the county and the two patients under Thomson’s conservatorship by failing “to advise the county of its right to respond and/or comment” on the information that led to its decision.

The suit also said that the reviews of the patient records “were not calculated to determine whether (Hillcrest) is unable or unwilling to comply with its obligations” and “did not assure that they would acquire the information that they should have in a manner fairly calculated to lead to reasonable decision-making.”

The hearing before an administrative law judge is expected to take place within 90 days.