CMS has rescinded its April 11 determination to terminate Modesto, Calif.-based Stanislaus Surgical Hospital's Medicare contract.
In a May 3 letter shared with Becker's, the federal agency said the decision is "based on additional documentation and information received," including the hospital's May 1 letter "expressing its willingness to work to correct its condition-level deficiencies and efforts to meet the statutory definition of a Medicare-certified hospital."
CMS also said SSH's letter "expressed that it would rather attempt to remain certified as a hospital than receive an expedited opportunity to be certified as an ambulatory surgery center. In response, CMS has decided to exercise its discretion and provide SSH with another opportunity to remain certified as a hospital if an acceptable plan of correction is promptly implemented and substantial compliance is maintained. CMS reserves its full authority, including authority to terminate SSH at a later date."
CMS is giving the hospital until May 15 to submit an acceptable plan of correction that will include the dates by which SSH expects to be in full compliance with Medicare conditions of participation. CMS also said it will conduct an unannounced onsite survey no later than July 31 "to determine whether SSH has substantially complied with the conditions of participation and to further assess whether SSH has made sufficient progress with meeting the statutory definition of being 'primarily engaged' in providing inpatient, hospital services."
"SSH and CMS have had productive discussions, and SSH will now go through the more standard process of responding to deficiencies and submitting a plan of corrections for approval," Patrick Haley, a spokesperson for the hospital, told Becker's.
On April 11, CMS notified hospital leadership that it would terminate its Medicare Provider Agreement with SSH on April 30, citing the hospital's non-compliance with multiple conditions of participation related to issues such as the hospital's handling of patient emergencies after surgeries, infection prevention and control, and sterilization processes and governance.
Later that month, Reps. John Duarte, Tom McClintock, Josh Harder and Jim Costa as well as Sen. Alex Padilla advocated for CMS to give the hospital a 45-day extension, according to the Turlock Journal.
This was followed by CMS rescinding the determination to terminate the hospital's Medicare contract after approximately 15 layoffs and dozens of furloughs had occurred, Mr. Haley said.
"SSH is confident that this will be resolved in the coming months," he said.
Meanwhile, a spokesperson for Sutter Health, which includes Memorial Medical Center in Modesto, has indicated it welcomes the ability to help accept cases originally scheduled at SSH.
"We continue to be in contact with physicians from Stanislaus Surgical Hospital to discuss how we can help accommodate any procedures from the facility to support healthcare access for the community," a spokesperson for the Sacramento, Calif.-based health system, told Becker's.
In a statement shared with Becker's, CMS said that safe, comprehensive healthcare "is a top priority for CMS. CMS is committed to holding facilities accountable for meeting certain health and safety standards necessary to be certified as a Medicare and Medicaid provider.
"On May 3, 2024, following discussions with the hospital, CMS decided to exercise its discretion and provide Stanislaus Surgical Hospital a period of time to come into compliance with our requirements to remain certified as a hospital if an acceptable plan of correction is promptly implemented and substantial compliance with those requirements is maintained. SSH must submit an acceptable plan of correction to CMS and demonstrate substantial compliance with CMS requirements in an on-site inspection to avoid termination from Medicare and Medicaid."
"SSH is grateful to CMS for the reconsideration of its original decision," the hospital said in a separate statement shared with Becker's. "SSH is extremely proud of our 5-star patient satisfaction score as published at cms.gov and will continue to prioritize the provision of high-quality patient care going forward. We greatly appreciate the loyalty and dedication of our 200 employees in supporting this important work. We look forward to continuing our 40-year tradition of serving our community."
Editor's note: This article was updated on May 9.