State regulators order Hacienda HealthCare to find 3rd party manager by January 23

PHOENIX (AP/FOX 10) -- Arizona state regulators have ordered Hacienda HealthCare to find and retain, with AHCCCS and DES approval, a qualified third-party manager to oversee day-to-day operations of the facility.

Hacienda HealthCare has been at the center of a mounting controversy involving a child that was born to a woman in vegetative state. The incident has prompted a sexual assault investigation by Phoenix Police

(Click here for complete coverage of the Hacienda HealthCare scandal)

FOX 10 has obtained a letter sent to Hacienda's new CEO, Patrick White, which was signed by AHCCCS Director Jami Snyder and DES Director Michael Trailor. In the letter, officials said they have conducted numerous site visits at Hacienda, after news of the scandal broke, with significant concerns raised and corrective action letters issued.

"Nonetheless, in order to guarantee ongoing improvement, additional oversight is immediately warranted and necessary to protect the medically fragile patients at Hacienda and to assure their loved ones that they are safe and protected," read a portion of the letter.

Regulators have given Hacienda until Wednesday, January 23 to identify and retain the third-party manager, after obtaining the approval of AHCCCS and DES. According to the letter, the third-party manager must meet a set of requirements, as laid out in state laws, and the contract with the third-party manager must require the manager to assess each resident at the facility, and establish individualized continuity of care plans no later than 90 days from January 16.

"Each continuity of care plan must ensure the safety of the resident and identify a plan in the event the resident needs to or desires to transfer to a different health care setting," read a part of the letter.

State regulators also require that the contract with the third party must, among other things, give either AHCCCS, DES, or both government organizations unrestricted access to "third party staff at the facility and any documentation regarding the work of the third party or the operations of the facilities".

Hacienda HealthCare, according to the letter, has until 5:00 p.m. on January 17 to respond, in writing, of its intent to comply with the letter, or the state will pursue all legally available remedies.

In a statement, officials with Hacienda HealthCare says they will respond to the state in short order, and that the board is considering the best possible action forward. Meanwhile, an attorney who represents the woman's family issued another statement, saying the woman's family expects the independent review of management practices and procedures to be transparent and prevent further patient abuse.

The Associated Press (AP) contributed to this report.