The state is hoping to recoup about $8 million, a move that is based on a federal judge's decision Tuesday that Broughton Hospital did not deserve to lose federal insurance payments.
The state psychiatric hospital in Morganton lost its federal insurance money for about a year, after investigators in August 2007 determined that conditions endangered patients. In February 2007, a patient died after being held to the floor. While investigators were checking hospital conditions after his death, another patient who was supposed to be closely monitored was injured in a fall.
Investigators said the hospital was not following proper procedures for restraining patients and delivering safe care. Administrative law judge Keith W. Sickendick disagreed, saying hospital staff made reasonable attempts to safely restrain the man who died, that its policies on patient restraint met state law and that the hospital did not deserve to be cut from the federal insurance program.
Further, the hospital did what it could to prevent the woman with a history of falls from hurting herself, the judge wrote.
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"It's a good day," said Lanier Cansler, secretary of the state Department of Health and Human Services. "The judge has vindicated the hospital, we believe, and we will be applying to get back about $8 million. We are hopeful we'll be able to retrieve that money."
The money would be a balm to the state budget during the fiscal crisis.
The loss of the federal funds touched off a wave of changes at Broughton. The hospital director, Seth Hunt, lost his job, and state administrators decided to keep 38 beds vacant while the staff was restructured to provide better supervision.
Cansler said the new hospital director, Thomas J. Mahle, would stay.
"This outcome shows things weren't as bad at Broughton as perhaps [reported], but that doesn't mean we aren't going to do everything we can to strengthen our facilities, improve our training of employees and provide the best care we can," Cansler said.
Lee Millman, a spokeswoman for the federal Centers for Medicare & Medicaid Services, said she did not have any information on the case and did not know whether the agency would appeal.
A second state psychiatric hospital, Cherry Hospital in Goldsboro, had its federal money cut off last year when investigators found that a man died after sitting in a chair nearly 24hours with no food, and two staff members were arrested in the beating of a patient.