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The federal government has restored funding for heart transplants at Baylor St. Luke’s Medical Center, two years after cutting off payment to the embattled Houston hospital for those procedures.

CMS announced the change in a letter the hospital received this week. The federal government stopped paying for heart transplants at Baylor St. Luke’s in August 2018 after an investigation uncovered an unusually high mortality rate among those patients. The program passed an unannounced federal inspection in August 2020, more than a year after it had officially applied for recertification in May 2019.

The COVID-19 pandemic has significantly delayed CMS’ inspection process, which is why the inspection of Baylor St. Luke’s didn’t take place until last month, said Deb Maurer, the hospital’s vice president of transplant services. To get federal funding restored, the transplant program had to send CMS documentation proving it had performed 10 adult heart transplants before the federal agency would launch its inspection. The hospital sent that paperwork in May 2019.

In the meantime, the hospital has continued to perform heart transplants, including on Medicare and Medicaid patients, even without federal reimbursement. The hospital has performed 44 heart transplants since October 2018 on both government and commercially insured patients, Maurer said.

CMS cut off Medicare funding for heart transplants a few months after ProPublica and the Houston Chronicle published an investigation into unusually high death rates among the hospital’s heart transplant patients within a year of their procedures. Medicaid is a state-run program but typically aligns reimbursement decisions with Medicare.

Since then, the program has recruited new leadership with a fresh perspective on what it needed, Maurer said. The program has new patient and donor selection processes and an “extremely robust” quality and performance improvement program, she said.

“I would say that, respectfully, we’ve built a new program here,” Maurer said.

Part of the revamp includes rebuilding trust in the community—including with the local cardiologists needed for referrals—a process that will take time, she said.

“I think building trust will be an ongoing part of what we do every day,” Maurer said.

The news outlets also uncovered higher than normal death rates among the hospital’s liver and lung transplant patients.

Maurer said in those programs, the higher death rate was the result of sicker patients and problems with donated organs, not staff errors during the procedures. As a result, the programs have changed their patient and donor selection criteria.

“If you think about it, people who are coming forward needing a transplant are obviously individuals who are sick,” she said.

In the months after the CMS revocation in August 2018, it became clear the hospital’s problems extended beyond its transplant program. Three of the hospital’s top executives resigned—including then-president, Gay Nord—in response to a serious error in which a patient died after staff used the wrong blood type during a blood transfusion. An extensive federal investigation uncovered numerous deficiencies, including around infection control, quality assurance and food services.

The Houston hospital has been a drag on CommonSpirit Health’s financial performance since the massive Chicago-based health system formed through a February 2019 merger. One of the legacy systems that formed CommonSpirit, Catholic Health Initiatives, gained an ownership stake in Baylor St. Luke’s through a 2014 joint venture.

CommonSpirit’s chief financial officer conceded on a December 2019 investor call that the system is disappointed with the performance of its Texas market, but that it is confident results will improve.

CommonSpirit plans to hammer out a $2 billion bond financing package in the coming months, part of which will be new money for capital projects. A spokesman for the health system didn’t say whether a portion of that would go toward a planned hospital tower replacement at Baylor St. Luke’s, a project that’s been pushed back.

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