AUGUSTA, Maine — The federal government notified the Maine Department of Health and Human Services on Wednesday that it is terminating Riverview Psychiatric Center’s Medicare Provider Agreement, essentially shutting off some $20 million in annual federal funding at the state-run Augusta hospital.

The issue has been simmering for months and in August caused a scramble in the Legislature to correct the problem. At issue is the federal Centers for Medicaid and Medicare Services’ contention that the hospital, which is run by the state, is overcrowded, inadequately staffed and using improper methods such as handcuffs and Tasers to subdue violent patients.

DHHS Commissioner Mary Mayhew said Thursday that most of those problems have been corrected and that her department is working with the Attorney General’s Office to challenge the ruling.

“I am confident [in the state’s case] because we believe the federal decision is not supported by federal policy,” said Mayhew during a telephone interview with the Bangor Daily News. “The federal government accepted our plan of correction at the end of August. We have addressed the concerns and the issues that have been raised. We are continuing to implement other reforms to ensure high-quality, patient-focused services.”

Mayhew acknowledged that the state’s appeal may be difficult and perhaps time-consuming, due in part to the federal government shutdown that went into effect on Tuesday.

“It’s difficult to know what will satisfy them when we do not have a decision that is based on policy,” she said. “I am extremely concerned about the disconnect by the federal government related to their concerns and the state’s responsibility for meeting the needs of our civil and forensic clients in the hospital.”

J. William Roberson, associate regional administrator for CMS’ Northeast Division of Survey and Certification, who wrote the Sept. 27 decision letter to DHHS, could not be reached on Thursday. Roberson’s voicemail message said he is on furlough because of the federal government shutdown.

Riverview handles many of the state’s criminal defendants who are found incompetent to stand trial or not criminally responsible for their crimes because of acute mental illness. The hospital also handles criminal suspects who need psychological examinations before their trials and, when able, cares for county jail inmates and members of the general population who need mental health services.

As part of the state’s response earlier this year, the Legislature enacted an emergency bill, LD 1515, during a special session in late August, and Gov. Paul LePage signed it into law on Sept. 6. Among other things, the bill allowed the Department of Corrections to take in some of the prisoners who have traditionally been handled at Riverview in order to free up beds at Riverview.

According to DHHS, the federal decision was the result of two surveys conducted by the federal government, the first of which was in March 2013. CMS determined that Riverview was not in compliance in several areas relative to staffing, overcrowding and the separation of operations between forensic and non-forensic patients. In August, CMS accepted Riverview’s correction plan, which included removing 20 beds and creating a separate place for patients who are aggressive and pose safety risks to staff and other patients.

“We have taken significant steps to address these most critical issues around patient safety, staff safety, quality and well-documented treatment plans,” said Mary Louise McEwen, Riverview’s superintendent, in a written statement. “The remaining issues do not rise to a level of severity that warrants termination. Most are easily addressed and in one case, we are being held to a standard that we cannot find in the rules that govern participation in the Medicare program.”

The outstanding compliance problems at Riverview, as far as the federal government is concerned, involve follow-up measures to the separation of the potentially dangerous patients from the rest of the population. The unresolved concerns involve the development of reporting forms, the movement of equipment between units and the sharing of staff.

“We cannot find in any of the federal rules a requirement that staffing in these units be separate,” said McEwen. “The staffing ratios in the hospital clearly meet federal requirements and can provide for appropriate care for our clients.”

Mayhew said that concurrently with reviewing its legal options, DHHS is looking for ways to keep the hospital operating without the federal funding, which comprises about half of Riverview’s budget. Rep. Michael Carey. D-Lewiston, suggested during a meeting of the Legislature’s Appropriations Committee on Wednesday that DHHS has a funding surplus of some $9 million created by vacant positions and other factors that could be used to help solve the staffing shortages at Riverview.

Mayhew said that money may be part of the solution but not all of it.

“We certainly will look at what options we have within those resources,” she said. “We simply cannot make up a potential annual loss of nearly $20 million in federal funding should this decision stand.”

In the short-term, Mayhew said Riverview has closed new admissions of civil patients — meaning patients that are not at Riverview as the result of decisions by the Department of Corrections or the judicial branch.

Riverview Psychiatric Center opened in the early 2000s to coincide with the closure of the Augusta Mental Health Institute in 2004. Part of that transition was required by a court-ordered consent decree that governs how the state handles psychiatric patients. Mayhew said one of her department’s top priorities is to ensure that the state remains in compliance with the consent decree.

“The hospital absolutely continues to be focused on the terms of the consent decree and has worked over many years to meet the terms of the consent decree to advance on the quality of services being provided at the hospital,” said Mayhew. “That focus remains.”

Christopher Cousins

Christopher Cousins has worked as a journalist in Maine for more than 15 years and covered state government for numerous media organizations before joining the Bangor Daily News in 2009.