A state mental hospital in Butner is in danger of losing federal money for failing to prevent violence, and another in Morganton that already has lost funding is examining its practices after a questionable death.

After examining John Umstead Hospital in Butner last week, investigators working for the federal government recommended that it lose federal money. They faulted the hospital for "failing to prevent patient abuse and failing to monitor and modify a care plan to prevent repeated incidents of patient-to-patient and patient-to-staff abuse," according to a Tuesday letter to the hospital.

And state mental health officials said in a report this week that a man who died of undisclosed causes at Morganton's Broughton Hospital had not received a routine medical exam. Two other patients failed to get proper attention for life-threatening conditions.

In August, the federal government took a rare step and cut off payments to Broughton -- more than $1 million a month -- after a patient died after being restrained and another was seriously injured in a fall. The state mental health division vowed not to turn away patients and to make up the losses with state money.

In all, three of the state's four psychiatric hospitals have been threatened with loss of federal funds this year or have actually lost them. Cherry Hospital in Goldsboro was also threatened with the loss, but investigators accepted an improvement plan.

Only Dorothea Dix Hospital in Raleigh has kept out of trouble.

The news about Umstead is a blow to a mental health system that has been on shaky footing since a 2001 reform effort. Counties have been shedding programs so private businesses can begin offering care. That has left gaps, with frail people unable to find services. At the same time, short-term patients have been flooding state hospital wards, and Dix is closing next year.

Umstead, about 40 miles north of the Triangle in Granville County, has not received a written report of the investigation, said Patsy Christian, the hospital's CEO. It has about three weeks to devise a plan to correct deficiencies before money is cut off. Investigators cited problems with the hospital's governing body, patients' rights and nursing services.

Christian said the hospital did not have more violence than other state psychiatric hospitals. "We have good policies in place," she said.

Mike Moseley, director of the state mental health division, said he didn't know the details of the Umstead investigation.

The hospitals aren't getting worse, Moseley said, but staff members sense that investigators' criteria for recommending the loss of federal money have changed. Investigators have rung alarms not only about state mental hospitals but also about private hospitals and university hospitals, he said.

"This is unusual," Moseley said. "I'm seeking answers myself."

While Umstead is focused on keeping its money, Broughton, which is about 200 miles west of the Triangle near Hickory, is trying to improve so it can get its payments restored.

The critical review, conducted in November, found that the man who died had refused an examination that would have identified an important medical problem. Hospital staff failed to document attempts to examine him after his initial refusals.

Failure to adequately record important patient information, a theme that runs through the review, has been a long-standing problem at Broughton. A federal investigator identified problems with poor patient records nearly two years ago.

The November review found that records on two other patients with complicated medical conditions lacked notes indicating that doctors were overseeing their care. In another case, staff did not document an assault.

The missing assault documents were "typical of the pervasive reticence of the clinical staff at every level to be honest and forthcoming," the report said.

Dr. Mike Lancaster, a top state mental health administrator overseeing changes at Broughton, would not give details on the patient death, other than that the man died after federal money was cut off in late August.

But the last Broughton death reported to the state Division of Health Service Regulation occurred Aug. 1. "If it was indeed an accidental death and it was not reported to us, that would not be in compliance with state law," said Jeff Horton, the division's chief operating officer.

The Broughton review was a test run to see how the hospital would stand up to a federal inspection needed to regain Medicaid and Medicare money. The problems found show that the hospital is not yet ready to invite federal investigators back, Lancaster said. "We have some things to do," he said.

Disability Rights North Carolina, an advocacy group monitoring the problems and proposed improvements at Broughton, is investigating two other suspicious deaths, said Executive Director Vicki Smith.

It is not unusual for a hospital's staff to be reluctant to talk about assaults, she said. State hospitals are major job centers that have employed generations of families in small towns.

"They have a tendency to close ranks and protect themselves," she said.

(Staff writer Michael Biesecker contributed to this report.)