RALEIGH - An aging state mental hospital in Butner is once again in danger of losing federal money for failing to meet expected standards.

State officials disclosed Monday that administrators at John Umstead Hospital received a letter last week warning that the facility has until April 25 to shape up or lose federal insurance reimbursements for patients treated at the facility.

Umstead's leaders pledged to make numerous improvements after a November review determined they failed to prevent "repeated incidents of patient-to-patient and patient-to-staff abuse."

A follow-up inspection in December found additional problems, and in March federal authorities determined some issues still had not been fixed.

Steven Oxley, the hospital's director, said Monday that no patient injuries had resulted from the latest set of problems identified by the outside inspectors. He said he is confident Umstead will avoid the loss of federal funds.

"I would be extremely surprised if that happened," Oxley said. "I think we have corrected all the problems they cited" in the most recent letter.

All four of North Carolina's public mental hospitals have received similar warnings in the past year.

Though it is rare for a state-run facility to lose federal funding, Broughton Hospital in Morganton was cut off in August after the death of a patient who was being restrained by staff.

Since then, state taxpayers have had to pay more than $8 million to make up for the loss of federal revenue from Medicaid and Medicare. In a statement last month, state officials said they have made big strides toward restoring Broughton's status, but no final determination has been made.

The most recent problems at Umstead have to do with staff members failing to wear required body alarms used to signal for help in an emergency, and a March 6 incident when a patient tore down an aluminum curtain rod from over a window and threatened to "poke staff eye out if anyone touch him," according to a staff member's written account. Objects that could be used as a weapon are considered a problem.

The failure of workers at Umstead to wear body alarms, which are similar to electronic pagers, was identified as an issue in a previous inspection, and administrators filed a written plan in February pledging to fix the problem.

When federal inspectors returned March 13, however, several staff members were not wearing the alarms. Inspectors also cited several problems with the hospital's aging buildings, including doors with broken locks.

Umstead is scheduled to close by July 1, along with Dorothea Dix Hospital in Raleigh, though both facilities are frequently so full that administrators refuse to accept additional patients.

The two old facilities are set to be replaced by the new Central Regional Hospital in Butner. But a statewide shortage of mental hospital beds will require that some wards at Dix and Umstead will continue to operate.

The opening of the new hospital has been delayed at least three times due to problems hiring trained staff and design flaws that could make the $120-million building unsafe for patients. Oxley said Monday he expects to meet the July 1 target for moving most daily operations to the new hospital.

"That's the date we are still all working toward," he said.

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