Feds can cut Medicare from rehab center

ST. PETERSBURG -- The federal government won a crucial round with a Tampa Bay area assisted living facility when a judge ruled it could terminate its Medicare and Medicaid programs.

Bayou Shores, which owns the psychiatric facility Rehabilitation Center of St. Petersburg, filed suit against the government, claiming authorities couldn't end its participation in the federal programs designed to pay for health care to senior citizens and those with financial or physical hardships.

The Florida Agency for Health Care Administration informed the Centers for Medicare and Medicaid Administration last August that conditions at Bayou Shores “constituted immediate jeopardy to the patients' health and safety,” according to a release. Because it was being terminated from Medicare, federal law also requires the federal organization to terminate a provider from Medicaid as well.

Bayou Shores immediately filed suit, seeking a temporary restraining order against the Medicare and Medicaid Administration, which was dismissed by a district court. The judge at the time refused to hear the case while Bayou Shores still had options through an administrative appeal process it could pursue.

In response, Bayou Shores filed for Chapter 11 bankruptcy protection, according to a release, seeking once again to stop the federal government from cutting its Medicare and Medicaid agreement. This time, the facility was successful, saying the Medicare and Medicaid agreements were executory contracts that could be assumed in bankruptcy, and under the court's jurisdiction.

The federal government appealed to the district court, however, which ruled that the bankruptcy court does not have that jurisdiction, and it's up to the federal government what providers it includes in the program.