U.S. agency moves against Nevada hospital cited for patient dumping SAN FRANCISCO (Reuters) - Federal authorities have taken disciplinary action against a Las Vegas hospital cited for improperly sending newly released psychiatric patients by bus to neighboring California and other states in a practice called "patient dumping." The Rawson Neal Psychiatric Hospital was warned that it was in violation of Medicare rules governing the discharge of patients and could lose critical funding under the federal healthcare insurance program if it failed to correct the problem. The notice came in a letter on Friday from the Centers for Medicare and Medicaid Services, an agency under the U.S. Health and Human Services Department, to the Southern Nevada Adult Mental Health Services agency, which is licensed to run the hospital for the state. The hospital has come under increasing scrutiny since the Sacramento Bee newspaper last month documented that Rawson Neal had given one-way Greyhound Bus tickets to as many as 1,500 patients for destinations in California and 46 other states over the past five years. Some of those patients - how many remains the subject of multiple investigations - were put on buses without sufficient food, medicine or plans for housing and continued medical treatment. The letter said that a March compliance survey, which remains confidential, "reported serious deficiencies" in discharge planning and governance. Rawson Neal has until May 6 to furnish a plan to remedy the problems or face further actions to terminate its Medicare provider agreement, the letter said. Rufus Arther, a Medicaid operations branch chief for Nevada and California, said he was unable to quantify the amount of money at stake for Rawson Neal, but said it would account for a "significant" portion of the hospital's revenue. Dr. Tracey Green, Nevada's top state health officer, told Reuters earlier this week that the hospital had tightened its discharge policies to ensure that patients released to other states had appropriate after-care treatment plans in place. She also said all psychiatric patients would from now on be chaperoned when put on Greyhound buses. The Bee's expose grew from its story about one particular discharge, that of James Flavy Coy Brown, 48, who was put in a taxi to a Greyhound Bus station with a ticket for a 15-hour ride to Sacramento in February and a three-day supply of pills to treat his schizophrenia, depression and anxiety. Staff at a Sacramento homeless shelter described him as arriving frightened and disoriented, without money or medication, though Brown eventually was reunited with a daughter from the East Coast who had not heard from him for several years. A state review of the matter led to discipline against two employees, and Nevada health and human services spokeswoman Mary Woods said earlier this week that an ongoing probe has uncovered violations of hospital policy in four or five discharges. While vowing to fully investigate the issue, Nevada Governor Brian Sandoval and state health officials have denied that illegal, out-of-state busing of patients is rampant or that the state condones or practices patient-dumping. In the meantime, local officials in San Francisco and Los Angeles have said they are looking into the matter. The Bee found that one-third of the patients given bus tickets went to California, the bulk of them arriving in Los Angeles, while 36 ended up in San Francisco. On Thursday, California Congresswoman Doris Matsui called for investigative hearings by the U.S. House of Representatives Energy and Commerce Committee, which has jurisdiction over healthcare issues, into "patient dumping." Dr. Green described the incident with Brown as a mistake. "The intent was never to dump this client," she said. The intent was to accommodate this client's request, to have this patient involved in his own discharge plan. There's never been the intent to just put a person on a bus and wave goodbye. Federal law requires hospitals participating in Medicare to treat their patients until their condition is resolved or stabilized and to plan for after-care following discharge. A Southern Nevada Adult Mental Health Services website said the agency also runs eight clinics serving the Las Vegas area and rural communities in the region. Editing by Steve Gorman and Cynthia Osterman