Raleigh, N.C. — Early indications suggest Central Regional Hospital likely will not lose its certification to receive Medicare and Medicaid reimbursements.

That's according to Dr. Michael Lancaster, co-director of the state Division of Mental Health who is also serving as the hospital's interim director.

Lancaster said Thursday that inspectors working on behalf of the Centers for Medicare and Medicaid Services have told him they have recommended the hospital's federal funding not be withdrawn.

The recommendation, which comes after an on-site evaluation of a corrective plan last week, is not final, and CMS could reject it, Lancaster added.

Last month, inspectors said the hospital's Butner and Raleigh campuses had failed to provide care in a safe environment and to prevent patient abuse and neglect.

That placed the hospital in immediate jeopardy of losing reimbursements for treating patients covered by the federal insurance programs.

According to a report, the team investigated the inappropriate restraint of a patient that occurred during their survey.

Lancaster said earlier this month that the hospital took immediate action to address the issue, including disciplinary action against the employees involved.

Inspectors also identified burned-out light bulbs and deficiencies in the fire protection system on the older Raleigh campus (Dorothea Dix Hospital) and a locked exterior door in an unoccupied portion of the Butner facility.

If CMS pulls funding from the hospital, that will likely mean that the Department of Health and Human Services will have to shift millions of dollars in its budget to continue providing care to patients on Medicare and Medicaid.

DHHS is already reallocating approximately $800,000 monthly in its budget to treat patients at Cherry Hospital in Goldsboro after the hospital lost its certification because of issues brought to light after a patient's death in April

Losing federal funding at Central Regional would be bad timing for the department. Gov. Mike Easley has asked all state departments to cut their budgets by as much as 7 percent.