Posted on Wed, Apr. 23, 2008

U.S. can cut Oakwood funds

Judge rules against state over mental health facility

By Sarah Vos

SVOS@HERALD-LEADER.COM

The federal government has authority to pull funding from the troubled Communities at Oakwood, an administrative law judge decided in a ruling announced Tuesday.

The judge ruled against the state, which had appealed a September 2005 decision by the Centers for Medicare and Medicaid Services to cut off funding.

The ruling could mean the loss of millions of dollars for the Somerset nursing facility, where more than 200 people with mental retardation live. Medicaid pays for approximately $42 million of the $78 million a year it costs to run the facility.

But the ruling's impact is unclear, state officials said.

"We have a lot of unanswered questions," said Vikki Franklin, a spokeswoman for the Cabinet for Health and Family Services.

The state may appeal the ruling, or it could ask for a complete recertification of the facility -- a process that would involve an on-site visit from federal regulators, Franklin said.

Joseph Toy, president and CEO of Bluegrass Regional Mental Health-Mental Retardation Board, which now runs Oakwood, suspects the state will appeal the decision and then ask for licensure review.

"That will be a big deal," he said.

Oakwood would pass, provided surveyors aren't biased because of the facility's history, he said. "There's incredible improvement there, and it's a really good facility," he said.

CMS pulled funding from Oakwood after an unsupervised resident drowned in a bath tub. An investigation uncovered other supervision problems, including suspicions that two unsupervised residents who worked off-site may have been sexually abused.

The decision by CMS came during a low-point for Oakwood. Over 2005 and 2006, the facility received 24 Type A citations -- the most serious -- for failing to keep residents from serious injury or harm. Two of them involved deaths: the drowning and an earlier incident where a resident died after choking on a hot dog.

More than a dozen staff at Oakwood were arrested for abusing residents, although several have since been acquitted.

The state hired Liberty, a Pennsylvania-based health care company, to manage Oakwood in November 2005. But problems continued.

In November 2006, Bluegrass -- which also runs Eastern State Hospital in Lexington -- took over management.

Oakwood residents and their family members say there have been visible improvements. However, in 2007, the facility had three Type A citations. One of those was successfully appealed, and another is being appealed, Toy said.

Don Putnam, president of the Parent-Relative Organization for Oakwood Facilities Inc., or PROOF, says conditions have become "much better" because of the work of Bluegrass.

"We're much happier than we were," Putnam said.

The Herald-Leader is pleased to provide this opportunity for readers to comment on stories and issues. However, we urge readers to avoid personal attacks or inappropriate remarks in their postings. Some of the comments may be reprinted in the newspaper. The views expressed here are not those of the Herald-Leader or its staff. Registered user names are posted for comments.