Franchising the future
Despite mounting concerns from public-health officials and neighboring residents, a proposal to build a 120-bed private psychiatric hospital in north Sacramento received unanimous approval from the Sacramento City Council last week.
Council members took a narrow view of their role heading into the feverishly anticipated¡ªand thrice-punted¡ªvote on December 10: They didn’t decide whether embattled psychiatric chain Signature Healthcare Services LLC, with its lawsuits and fines and shuttered hospitals, was a good steward for this project. They decided whether a squared lot on Expo Parkway was appropriate space upon which to construct the facility.
On Monday, Vice Mayor Angelique Ashby told SN&R that Signature Healthcare’s past was “not a land-use issue.”
State and federal health-care agencies are responsible for licensing and regulating what would be Signature’s ninth private hospital in the country, while highly sought accreditation is provided through The Joint Commission, which charges health-care organizations for its accreditation services.
Signature, which operates as Aurora Behavioral Health Care, currently has eight hospitals in four states. A decade ago, it had two more.
The company closed two Detroit-area hospitals in 2000 and 2002 amid claims that they ran afoul of IRS and state health-care regulators, among other troubles. A Detroit Metro Times investigation in 2003 documented allegations that the practices inflated Medicare payments by extending patient stays and hospitalizing those without proper documentation, which is also being argued in federal court in Southern California.
Signature’s facility in Pasadena is the subject of a federal lawsuit charging fraudulent billings and poor management that contributed to the deaths of eight patients and multiple rapes. Company reps say that lawsuit has been halted, but online court records show a jury trial still possibly looms.
Last year, the California Department of Public Health’s licensing and certification division issued Signature’s San Diego hospital an administrative penalty. The nature of the violation remains sealed.
In 2010, the U.S. Department of Health & Human Services fined Signature $104,747 for employing someone who “was excluded from participation in Federal health care programs.”
In 2009, Signature paid a $350,000 settlement to Michigan state health officials following allegations that the company burned patient records at three hospitals.
Concerned residents say they dug up other violations.
The company’s attorney, Gregory Thatch, termed the legal issues “extremely typical” for a psychiatric hospital and “fairly minor in scope.”
In a phone interview, Ashby said the applicant defended its record.
“The city is not a licensing nor health-care-providing entity, so we are not an appropriate finder of fact on the claims made.”
What did dominate last week’s discussion was the pronounced need for mental-health resources, illustrated by the testimonies of two local emergency-room doctors who told council members their ERs have been inundated with mental-health patients ever since the county was forced to close its 50-bed psychiatric facility in 2009.
“Adding more beds into the system would relieve the strain tremendously,” said Dr. Kevin Jones, an ER physician at Sutter General and Sutter Memorial hospitals.
Sacramento County has the second-highest rate of involuntary holds per capita in California, according to Jones, and one of the highest suicide rates.
The Affordable Care Act is expected to expand access to both insurance and psychiatric care. Which means more paying customers for a company that’s dangling a $25 million facility, $16 million annual payroll and 210 jobs in a depressed part of Sacramento.
Thatch said his clients believe an additional hundred beds might be warranted on top of the 120 already proposed, and noted that one of the area’s three other psychiatric facilities, Sierra Vista Hospital, recently applied to add 50 beds to its Bruceville Road location.