Los Angeles County health officials won a vital reprieve Monday when federal regulators agreed not to immediately pull the plug on funds for the troubled Martin Luther King Jr./Drew Medical Center, as it prepares to merge with another county hospital.
When King/Drew failed a make-or-break inspection over the summer, regulators said they would withdraw by Nov. 30 the $200 million that the hospital received annually from Medicare. But regulators have now agreed to keep the money in place until at least March 31. However, if the hospital's quality of care does not show continued improvement, the extension could be canceled at any time, according to a letter from Medicare officials to county heath executives.
Federal officials rejected the county health chief's request for a $50-million grant to pay for part of the management transition.
"We sincerely hope that the nearly three-year period of repeated findings of compromised health care [at King/Drew] can be brought to a close," wrote Dennis Smith, a state operations director with the U.S. Center for Medicare and Medicaid Services.
The decision by the Medicare agency will keep the Willowbrook hospital afloat while it is downsized and shifted to the control of Harbor-UCLA Medical Center near Torrance.
The reprieve "averted a serious health crisis," according to a statement from county health officials Monday.
The news precedes a public hearing Monday about proposed cuts to the hospital. County officials had desperately wanted federal support of the merger plan prior to the hearing to alleviate concerns of area residents and healthcare advocates.
"It's a big step; it's a good step," said county health chief Dr. Bruce Chernof. "I see it as a vote of confidence. But it's also a short timeline. We're going to have to demonstrate between now and then that we're going to get this work done."
Chernof said county health officials would look for alternate sources for the $50 million in transitional expenses, including other federal options, state or local money and philanthropic foundations. But that money, Chernof said, is secondary to the extension of Medicare funds.
"This is what we needed," Supervisor Zev Yaroslavsky said of the federal decision, which he called "essentially an endorsement" of the county's plan to restructure King/Drew.
"We've come an awful long way in a very short period of time," Yaroslavsky said.
Supervisor Yvonne Brathwaite Burke, whose district includes the hospital, said it was "certainly very encouraging that at least there is an acceptance" of the proposed merger.
Burke said much of the $50 million is needed to fund displaced Drew University medical residents; she was hopeful area hospitals would accept some of them. Chernof plans to present supervisors with options for Drew residents at next week's board meeting.
In spite of the denied $50 million, "we were grateful for what they did give, which was some breathing room," said Roxane Marquez, spokeswoman for Supervisor Gloria Molina.
A broad coalition of community and political leaders including Rep. Maxine Waters (D-Los Angeles), Gov. Arnold Schwarzenegger, Sens. Dianne Feinstein and Barbara Boxer (D-Calif.) and others also pushed federal officials to lend financial backing to the plan to refashion King/Drew.
Phillip Chen, an aide to Supervisor Mike Antonovich, said the supervisor was pleased by the funding extension. Chen said "it absolutely makes sense" that the request for $50 million in transitional money was rejected. County health officials have to justify why they want the money, he said.