Journal Star file photo HEIDI HOFFMAN

The Beatrice State Developmental Center has officially lost its federal Medicaid certification, and the state could soon lose the $25 million a year in federal funds used to run the institution.

The Nebraska Department of Health and Human Services received word Friday the state lost its appeal to remain certified, said Kerry Winterer, CEO of the agency.

The administrative law judge's decision authorizes the federal Centers for Medicare and Medicaid Services to terminate Medicaid funding, though that has not yet happened.

Attorneys are still studying the 20-page decision, and the state has not decided whether to appeal it to the full appeals board, said Jodi Fenner, director of developmental disabilities for HHS.

State leaders had expected to lose the appeal and the accompanying federal funds, and the Legislature included about $50 million in the two-year budget to offset the loss.

Gov. Dave Heineman has said Nebraska will reapply for Medicaid certification and hopes to get the institution - which now serves about 185 people with developmental disabilities - recertified within two years.

The state budget included another $17 million for additional staff and improvements.

The state has made improvements during the past year, including better staff-client ratios, more training a higher quality staff, Fenner said.

Fenner said the state and Centers for Medicare and Medicaid Services will meet next week to talk about recertification.

The decertification and appeal are based on past actions, Fenner said.

Staffers are now putting their hearts and souls into making the Beatrice center a better place, Fenner said Friday.

The center has been licensed as an intermediate care facility for people with mental retardation.

But the federal government ended the Beatrice center's Medicaid participation in December 2007 because of a history of serious problems at the institution.

The state appealed that decision, thus delaying the loss of federal funds.

The law judge's decision provided examples of problems at the Beatrice center before decertification.

"The facility has a significant history of noncompliance with program requirements and CMS has afforded it multiple opportunities to correct," according to the opinion.

Reach Nancy Hicks at 743-7250 or



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