Dana Ferguson

dferguson@argusleader.com

ROSEBUD, S.D. - A federal agency tasked with improving dangerous deficiencies in health care at two South Dakota hospitals is considering privatization as a key component in solving long-standing problems at each.

Indian Health Service (IHS) Principal Deputy Director Mary Smith in a closed meeting Tuesday met with officials from the Centers for Medicare and Medicaid Services (CMS), Rosebud Sioux tribal representatives and others to discuss a last-ditch agreement that could maintain a key source of federal funding for the IHS facility.

And the proposal to rectify problems at the Rosebud hospital hinges on bringing in contractors for the facility's shuttered emergency department and possibly to take over its management.

The 19-page draft agreement says privatizing the control of the two departments, at least in the short term, could help the hospital maintain its ability to bill to Medicare and Medicaid as well as to provide safer health care.

The draft agreement lays out processes for requesting proposals from private providers to manage the hospital's emergency department. A first request to manage the hospital's emergency department as well as two other struggling emergency rooms in Pine Ridge and Winnebago, Neb. IHS facilities closed April 11.

Brian Dillon, Rosebud Sioux Tribal Council Member, said IHS officials mentioned that more than 10 groups responded to the request for proposals to take over the emergency rooms, but the state's three largest health care groups weren't among them.

"That's a huge concern," Dillon said.

A spokeswoman for IHS said the agency was unable to provide additional information about the process, including the number of bidders, until an award is made. She also said the agency is working to improve services at all of its Great Plains Area facilities.

On the road, reporting on shuttered Rosebud ER

Should no award be made in the first round, a second more expansive search is to take place for a private group that can take over the emergency department. If awarded following that round, current and future IHS emergency department employees will train under the contracted doctors until they are prepared to take over, the draft agreement says.

And management of the facility will also be overhauled in phases, the draft agreement says. First IHS would appoint a management team of IHS staff from outside the region or or other non-IHS facilities to take over immediately. When IHS officials have identified a contract management firm, a permanent management firm or a combination of both, that group would be phased in over time, the draft says.

RELATED: In tense meeting, tribal leaders, IHS head talk solutions

The agreement also requires IHS to re-assess nearly all areas of the hospital's operations to prevent dangerous deficiencies cited in a November CMS report.

The report found that employees at the Rosebud facility hand washed surgical instruments for six months while a sterilizer was broken, didn't communicate that a patient had an untreated case of Tuberculosis and failed to monitor a patient who delivered a baby prematurely on a bathroom floor. The Rosebud emergency department was closed in December as a result of those reports and a staffing shortage.

Patients have since been diverted to the nearest emergency rooms in Valentine, Neb. and Winner, 45 and 55 miles away respectively.

The agreement also calls for IHS to implement a quality improvement network and a governing body of federal employees to assist and oversee hospital management. CMS will also provide an independent monitor to ensure that the facility is meeting the standards of the agreement, the agreement says.



And that could be critical for the facilities, Rosebud Health Board Chairman William Bear Shield said as the Rosebud hospital billed about $15 million to Medicare and Medicaid last year.IHS and CMS officials must reach a consensus on the terms of improving the hospitals in Rosebud and Pine Ridge by Friday. If they can't do that, the hospitals could lose their ability to bill to Medicare and Medicaid.

"We can't afford to lose that," Bear Shield said.

Tribal representatives on Tuesday said they were optimistic that the proposal would be approved as CMS wrote the bulk of it, but said they were frustrated to see few specific deadlines on when the Rosebud emergency room would re-open.

"They haven't placed any timelines on themselves," Dillon said. "For our people here, not having a date puts them in a false pretense that nothing is being done."

Tribal leaders say they were left out of IHS call for help

Federal officials are set to review a draft agreement for the Pine Ridge hospital Wednesday at that facility.

The agreement is set to take effect once it is signed and will be in effect one year from that date.

U.S. Sen. John Thune on Tuesday called for additional accountability from IHS officials and higher care standards as they work to make an agreement with CMS.

Follow Dana Ferguson on Twitter @bydanaferguson