Western State Hospital will be stripped of its federal certification next month and thus lose roughly $53 million in annual funding, the Centers for Medicare and Medicaid Services announced Monday.
That funding represents roughly 20 percent of the hospital’s yearly costs of $278 million.
CMS said in its announcement that it conducted an unannounced study of the facility in May and found that the hospital had not achieved “substantial compliance.” It listed nursing service and physical environment among the four standards that the psychiatric health facility in Tacoma failed to reach.
“The hospital will continue providing care to patients and remains steadfast in its dedication to providing a safe and compliant hospital to serve people with mental illness,” Cheryl Strange, the state Department of Social and Health Services secretary, said in a statement. “Today, our hospital leadership team and others in the department are focused on reviewing the report from CMS and identifying the remaining areas of concern.”
The facility has had a troubled recent past. Gov. Jay Inslee fired the CEO in 2016 after an accused murderer escaped, and later that year began a turnaround effort that involved appointing a new leader and allowing it to keep federal funds.
Last summer, state authorities investigated the facility, and their conclusions led CMS to determine that the hospital failed to meet requirements for Medicare hospital providers. Beginning July 9, state funds will fully cover the costs of new patients.
“These findings help affirm that our plan is the right thing to do, and we are as committed as ever to implementing the reforms and systematic transformation that we know are necessary,” Inslee said in the statement. “We need to provide our patients care in community-based facilities where they can be closer to friends and family.”