The state has notified KVC Hospitals that its co-mingling of different patient groups at a children’s psychiatric hospital in Hays violates federal standards and must stop.

KVC says it will comply with the directive, even though the state for 10 years has granted a dual license for the facility.

KVC Wheatland provides acute care services, as well as mental health treatment through a Medicaid program. Regulations say patients in a Psychiatric Residential Treatment Facility must be self-contained, but KVC offers both services on the same premises.

Gary Henault, a children’s program manager at the Kansas Department for Aging and Disability Services, outlined the compliance problems in a letter dated Feb. 12.

“It is clear that changes in this practice are needed to stay compliant,” Henault wrote.

The letter orders the facility to separate the services by April 1. Part of the goal is to “allow for the clear and appropriate billing for the services provided.”

KDADS secretary Laura Howard told lawmakers this week that KVC is working hard to maintain services in a community that needs them. The facility is the only children’s inpatient provider in western Kansas.

“Know that we have a commitment to working with our partners to see how this can resolve in a way that preserves those critical acute care services that I know the community is concerned about,” Howard said.

The compliance problem was discovered in a 2017 survey, which was the first the agency had conducted since 2010. It wasn’t clear why direction wasn’t given to KVC on the issue before now.

“My concern is the risk the state has if we don’t come into compliance with that, but at the same time, I also recognize the need to assure that we’re able to sustain services,” Howard said.

Jenny Kutz, a spokeswoman for KVC, said the Wheatland hospital has 24 beds. Instead of using them interchangeably, she said, the hospital will now designate 12 for acute care and 12 for PRTF patients and keep them separate.

“That flexibility is not quite the same,” she said.

Kutz said KDADS granted a dual license about 10 years ago to allow the hospital to meet unique needs in the underserved rural area of the state.

KVC plans to open a new children’s psychiatric hospital in Wichita later this year to help more kids get compassionate treatment closer to home.

“The need for youth psychiatric treatment is very high right now, perhaps higher than ever,” Kutz said.