State Hospital review creates budget shortfall

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(Host) The Douglas Administration may have to fill a $7 million hole in the budget next year because the federal government says it will not pay for patient care at the Vermont State Hospital.

The administration has appealed the federal ruling. But officials say the decision underscores the need to replace the aging Waterbury mental health facility.

VPR’s John Dillon reports:

(Host) The federal Centers for Medicare and Medicaid Services controls the government’s health care purse strings. And when CMS inspectors visited the hospital in September, they didn’t like what they saw.

The inspectors found exposed pipes that could allow patients to hang themselves. They noted errors in record-keeping and said the hospital had failed to set up a proper process to resolve patient complaints.

Michael Hartmann is the state mental health commissioner. He says CMS raised new issues.

(Hartmann) "Many of the areas that were found in the CMS survey were areas that were not previously identified or at least some of them may have been identified but not at the level of seriousness that was assigned by the CMS review. So, somewhat, this was a new set of eyes looking at the same place.”

(Dillon) The state will challenge the CMS ruling. But for now, it means the Douglas administration faces a $7 million short fall in this year’s budget.

But Northfield Representative Anne Donahue – a long time advocate on mental health issues – says the decision should not come as a surprise. She says she talked to CMS earlier this year, and warned the administration not to include the money in the budget.

(Donahue) "We clearly should not have been counting on it. There should not have been a budget built on it by the administration. There should not have been a budget passed with it by the Legislature. I communicated that to legislative leadership. I communicated that to the administrative leadership. And the decision was made, I guess, to gamble.”

(Dillon) The problems with the hospital are not new. In 2003, the hospital lost its federal certification in – and federal funds – after two patient suicides.

The legislature and the administration have worked to replace the facility, but progress has been slow. The plans include using regional hospitals for patients in crisis, residential recovery programs and a 15-bed, state-owned, secure facility in Waterbury.

Anne Donahue says the CMS decision underscores the urgent need to replace the hospital.

(Donahue) “But no matter how you break it into pieces, it all still costs money, and it all adds up to money that is very hard to find. So, people, I think, are looking for alternatives that cost less instead of saying, `We’ve identified what the need is, now we’ve got to make it happen.”’

(Dillon) Ken Libertoff is director of the Vermont Association for Mental Health. For more than 20 years, the Montpelier-based non-profit has called on the state to close the hospital. Libertoff says the state should have moved more quickly when the hospital first lost its certification five years ago.

(Libertoff) "If the state decides it wants to contest the findings of this report, that’s fine. But we need to move forward. I don’t think it’s going to be in our future to get federal funding back.”

(Dillon) Libertoff says the hospital has made improvements over the years, But he says the state needs a back-up plan if the federal funds are not available.

For VPR News, I’m John Dillon in Montpelier.

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