Despite a history of fraud charges, Tustin’s Newport Specialty Hospital has quietly served for years as Orange County’s centerpiece in a state system that serves severely injured youths.

The lives of these vulnerable patients — often paralyzed, nonverbal and needing breathing and feeding devices — were thrown into limbo with the announcement in April that Newport Specialty was about to be shuttered in the wake of huge enforcement penalties.

Furthermore, government reports indicate that the few local facilities that might be able to assume the care of these patients have troubling issues themselves, leaving limited options for families desperately searching for assistance.

The only other Orange County hospital in the Medi-Cal program that cares for such patients — HealthBridge Children’s Hospital in Orange — has been regularly cited in recent years for care deficiencies.

And a nationwide chain — Prime Healthcare Services, which is offering its West Anaheim Medical Center as an alternative — has acknowledged it is under federal criminal investigation for allegedly illegal boosting of charges to governmental programs.

Since her daughter was paralyzed two years in a vehicle accident, Julie Cruz of Hacienda Heights repeatedly has moved the 19-year-old through facilities, including Newport Specialty and HealthBridge, as she, like other families, hoped for improvement.

“The system is awful,” said Cruz. “I wouldn’t wish this on anyone. There is constant rejection. Where do you go?”

When approached by a reporter, Newport Specialty officials declined comment. A spokesman the Houston-based for-profit owner of HealthBridge said the hospital insists that its staff meet state and federal requirements. Officials from Prime Healthcare, meanwhile, denied any improprieties.

In Sacramento, Senate Bill 320, aimed at assisting families with brain-injured members, is moving through the Legislature. The measure also could force private insurance companies to bear more of the costs for these patients, who often are pushed onto tax-funded programs.

But the bill has stiff opposition from the powerful insurance lobby.

 Both HealthBridge and Newport Specialty, which was formally known as Tustin Hospital and Medical Center, are among 10 hospitals statewide that receive a total of $100 million in annual contracts from Medi-Cal for serving these patients.

Newport Specialty is the largest in Orange County, contracting with Medi-Cal for 37 pediatric beds. HealthBridge contracts for 14 beds.

They provide “subacute care beds” for youths in transition from general hospitals to family homes or long-term care institutions. The patients served are either indigents or those whose private insurance has run out.

Outside Orange County, six hospitals in the Medi-Cal subacute care program are in Southern California, but they often are full, forcing families like the Cruzes onto the institutional circuit.

That network was jolted in August when Newport Speciality’s owner, Pacific Health Corp., agreed to pay $16.5 million to settle federal criminal charges for a decade-long scheme of using homeless patients from Skid Row to ring up $16 million in bogus Medicare and Medi-Cal charges.

In March, the next financial blow that forced Newport Specialty’s likely closure was Pacific Health agreeing to $7 million in state fines and penalties for failing to pay employee wages and benefits. State officials say enforcement action was initiated when the fines weren’t paid.

Asked about contracting with such hospitals, a Medi-Cal spokesman in Sacramento wrote that the state “strives to ensure patient safety and access to care” and conducts audits and penalizes facilities for violations. Hospitals can be excluded from the program, but no exclusions in Orange County have been disclosed.

Last week, officials with the state Department of Public Health said they were investigating Newport Specialty for possible deficiencies in recent months.

Newport Specialty’s administrators said they are too busy trying to find a solution to comment. Pacific Health shut its office adjacent to the hospital after closing Anaheim General Hospital and two other facilities in March.

Past Parent Concerns

Arriving at Newport Specialty in 2011, Ann Marie Mares said she immediately was appalled at the facility she was touring for rehabilitation of her brain-damaged, 19-year-old son.

“The building looked abandoned,” said the Santa Ana mother, who refused to send her son there. “It was dilapidated with dried-out landscaping. It reeked of filth. I couldn’t believe insurance companies were paying for care there for patients with severe brain injuries.”

But other families did put youths at Newport Specialty, because it offered a service close to their homes or jobs for visits.

Delicia McFarland of Westminster is one such parent, whose gravely disabled son, Allen, ended up there in the spring of 2011 after complications from a brain tumor.

Previously, McFarland said, Allen had been a patient of HealthBridge, with its appealing, immaculate grounds and colonial-style main building.

But in April 2012 after accompanying her son to Children’s Hospital of Orange County (CHOC) for a brain treatment, she returned to his HealthBridge room for supplies.

Upon arrival, she said, she discovered his personal effects were removed and a training class was underway.

“I said, ‘What the hell is going on here?’ ” McFarland recalled. “It was bizarre … very unprofessional. HealthBridge never told us what they were going to do.”

Another parent, Doug Harris, said he had a similar experience last year at HealthBridge with his son, Markcus, who suffered a brain injury in 2011 from an asthma attack.

Markcus left for CHOC for acute care that lasted nine days, said Harris. HealthBridge then refused to readmit him, saying it exceeded the facility’s seven-day limit in such cases, Harris said.

“It was kind of upsetting and depressing, especially since his bed [at HealthBridge] was open for two or three weeks,” said Harris of Long Beach.

Like Harris, who was unable to find a closer facility in Los Angeles County, Cruz moved her daughter, Carli, to Newport Specialty a year ago. But her stay lasted only about five hours, as HealthBridge called offering a bed to the family, who then had private insurance.

“They said she could stay until she was 21,” said Cruz. But once the girl no longer required breathing assistance, she said, HealthBridge told them they had to leave.

Paralyzed, nonverbal and fed through a gastric tube, Carli is back in Los Angeles County in a skilled-nursing facility.

Other families using Medi-Cal also allegedly have faced pressure to move out, but they said they refuse to talk for fear of retaliation.

Records Show HealthBridge Care Deficiencies

It is not just parents of patients who have identified issues at HealthBridge.

A review of state inspection reports shows the hospital regularly has been sanctioned in recent years for deficiencies in nursing, medicating, administration, governance and care planning. Those records note the hospital agreed to correct the problems.

For instance, records state the hospital was cited and fined $10,000 in 2010 when an infant’s heel was burned by the “dangerous” use of an unapproved heat pack.

And a deficiency report dated in March states that in 2010 a student respiratory therapist’s efforts to service a breathing device led to another infant going into cardiac arrest, requiring 911 transportation by ambulance to an emergency room.

HealthBridge officials declined to discuss these issues in detail, citing patient confidentiality. They said they continue to contract with Medi-Cal for the beds, although one official acknowledged the facility no longer accepts long-term patients.

“We have no knowledge of any patient being forced to leave HealthBridge,” wrote Guido J. Cubellis, chief operating officer of Nexus Health Systems, the owner of the facility. “We work diligently with insurance carriers on behalf of our patients to help ensure that they receive the full benefits allowed under their plan.”

CalOptima Steps into the Fray

With Newport Specialty teetering, there has been no announcement by Medi-Cal authorities in Sacramento about what is planned should the hospital close.

CalOptima, which oversees payments for Medi-Cal patients in Orange County, and its dominant board member, county Supervisor Janet Nguyen, have attempted to steer Newport Specialty’s patients to Prime Healthcare’s West Anaheim.

The federal investigation into Prime Healthcare stems from allegations of illegally increasing charges at its California hospitals by exaggerating the severity of illness diagnoses, according to records and interviews.

In a hospital takeover bid in Rhode Island, Prime Healthcare acknowledged in February that hospital records had been subpoenaed by federal agents, according to Rhode Island state documents.

Prime Healthcare spokesman Edward Barrera denied impropriety by the firm, blaming its employee labor union for making the allegations. Recent inspections by hospital accrediting agencies also found no issues, he added.

And in 2007, the California attorney general’s office refused to allow Prime Healthcare to buy nonprofit Anaheim Memorial Hospital, questioning the bidding process and ruling the firm’s purchase wasn’t “consistent with the public interest.” Nonetheless, in 2011 Prime Healthcare received state approval to buy a San Bernardino County nonprofit hospital.

CalOptima spokeswoman Kellie Todd declined to respond when asked about Prime Healthcare serving Medi-Cal subacute care patients given such issues. She then cut off the interview, saying the issue wasn’t something her agency could address.

West Anaheim is refurbishing a 22-bed unit for subacute care, and Newport Specialty patients are welcome, once state officials license it, officials said. But Prime Healthcare will not take over Newport Specialty.

Parent Hospital Sleepovers

Mares was satisfied with the care at HealthBridge, but like other patients she adopted a sleep-in approach.

On medical leave from her Orange County job in child support services, Mares is a former hospital employee familiar with what can go wrong.

“I or a family member slept every night in his room,” she said.

After Markcus’ injury, Harris quit his job as a warehouse manager, sleeping every night in his Newport Specialty room.

He now gets more attention, which Harris called “a blessing.”

Rex Dalton is a San Diego-based journalist who has worked for the San Diego Union-Tribune and the journal Nature. You can reach him directly at

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