Grace Cottage Hospital
Grace Cottage Hospital

TOWNSHEND -- Grace Cottage Hospital will not lose its Medicare funding.

After a February inspection showed deficiencies at the Townshend facility, the federal Centers for Medicare & Medicaid Services (CMS) had threatened to terminate Grace Cottage's Medicare agreement as of today.

But a follow-up inspection showed that the hospital's detailed plan to correct those deficiencies is working, and Medicare funding "will continue with no interruption," Grace Cottage Chief Executive Officer Roger Allbee said Tuesday.

As he did earlier this month when the issue first was made public, Allbee again said he believes the process has made Grace Cottage a better hospital.

"These inspections are important because they allow you to focus on what is extremely important, which is patient care," Allbee said. "We always take pride in what we do ... but I think it's been a learning experience for everyone. We now recognize that we can do better."

A patient complaint spurred state regulators to visit Grace Cottage, which has 19 beds and is Vermont's smallest hospital. In a lengthy report after the February inspection, the Vermont Division of Licensing and Protection identified deficiencies found in care, privacy, documentation and night-shift staffing. Those issues included:

-- Failure to implement pressure-ulcer-prevention measures for a high-risk patient who then developed a pressure ulcer.


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-- Failure to obtain a physician-ordered wound culture.

-- Failure to initiate an alteration in a skin-integrity care plan "for a patient that clearly had it."

-- Lack of a standardized process for documenting care.

-- Failure to protect patient privacy by using non-hospital personnel to provide care (Rescue Inc.) and taking a photo of a patient's wound with a personal cell phone.

-- Failure to follow hospital policies for fall precautions, skin breakdown and uses of physical and chemical restraints.

-- No policy "to clearly define who should accompany patients that leave the facility for outside appointments."

-- Lack of adequate staff on night shift.

The full report, along with reports based on inspections of all of Vermont's hospitals, can be found at www.dlp.vermont.gov.

Following the state's report on Grace Cottage, CMS officials warned that the hospital's Medicare funding would be terminated as of May 28.

But by the time that public notice was published in the Reformer, the hospital already had an approved corrective plan. It included a new policy governing the use of photography, video or recording devices; new policies on use of non-hospital personnel; a new plan to prevent ulcers and improve wound care; and a "re-education" of staff members on policies to prevent patient falls.

The hospital also pledged to increase night-shift staffing and had formed a team to "review the current policy on involuntary procedures and restraints."

Inspectors returned to Grace Cottage May 20. Allbee said the visit lasted about a day and a half.

On Tuesday, a letter from CMS' Boston-based Northeast Division of Survey & Certification informed Allbee that "the Vermont Division of Licensing & Protection, Department of Aging and Independent Living ... has determined that your hospital is in compliance with no condition-level findings."

"Therefore, your facility requirements to participate in the Medicare program as a critical-access hospital have been met," Daniel Kristola, branch chief, wrote in the letter. "Your participation in the Medicare program will not be terminated on May 28, 2014."

Mike Faher can be reached at mfaher@reformer.com or 802-254-2311, ext. 275.