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Health and Family Services Cabinet
Cabinet for Health and Family Services Actively Seeking Reinstatement of Oakwood as Medicaid Provider

Press Release Date:  Thursday, May 01, 2008  
Contact Information:  Media Contact: Gwenda Bond or Vikki Franklin (502) 564-6786  

CMS Agrees to Continue Funding Through May 15
FRANKFORT, Ky. (May 1, 2008) The Cabinet for Health and Family Services (CHFS) is aggressively pursuing recertification and federal funding from the Centers for Medicare and Medicaid Services (CMS) for the Bluegrass Communities at Oakwood in Somerset. Following an administrative law judge’s appeal ruling on April 15, 2008, federal funding was lost as a result of the investigation of two incidents, one of which involved a death, in August and September 2005. The investigation and report identified “an immediate and serious threat to the clients’ health and safety.” CMS allowed funding to continue during the duration of the Cabinet’s appeal.

According to a letter from CMS, funding will continue for 30 days from April 15, provided CMS is assured that CHFS is protecting the well-being, safety and health of Oakwood residents, and that appropriate transitional efforts are under way.

“The Cabinet has directed the Bluegrass Regional Mental Health-Mental Retardation Board, the facility’s manager, to focus all of its efforts toward that goal,” said CHFS Secretary Janie Miller. “A Cabinet team is on-site at Oakwood, assisting Bluegrass. We are working diligently to assure that the residents continue to receive appropriate care in a safe environment, and to assess Oakwood’s readiness for reinstatement in the Medicaid program.”

CHFS also plans to identify an independent team to assist in finalizing preparations for the surveys required by CMS for reinstatement.

“Recognizing that we may experience a gap in federal funding, the Cabinet will explore, in cooperation with families of the Oakwood residents and providers, opportunities for transition to community placements or alternative settings,” Miller said.

Toward that end, CHFS plans to meet with parents, guardians and other constituent groups to discuss the loss of federal funding and to explore transition opportunities. The Cabinet also plans to work with the Division of Protection and Advocacy to ensure additional assistance from advocacy organizations and with community providers with proven histories of successful support of individuals similar to Oakwood residents.

CHFS continues to consult with CMS and the Department of Justice throughout this process.
Following the investigations in the fall of 2005 that resulted in termination, the facility underwent several management changes, and the facility continued to receive Type A citations, the most serious violation issued by the Office of Inspector General.

In September 2006, CHFS contracted with the Bluegrass Regional Mental Health-Mental Retardation Board to assume full management responsibility for the facility. In the contract, Bluegrass agreed to operate Oakwood in compliance with all requirements, and has made significant progress in improving the safety of the residents.

Oakwood's current annual budget is approximately $78 million, of which roughly $60 million comes from the Medicaid program.

Oakwood currently serves 224 people with mental retardation, 24 of whom are in the process of already being transitioned to community placements.


Last Updated 5/1/2008