LITTLE ROCK — Gov. Mike Beebe applauded the staff of the State Hospital on Wednesday for its work to return the hospital to Medicaid compliance after being dropped from the federal health program because of poor patient care and facilities.

"Every knows what kinds of issues and problems have existed in the past," Beebe told more than 100 employees at a reception in their honor. "Every step of progress that we make toward eradicating all of the problems that existed before is something that all of you and all of us can take pride in."

In December 2010, the U.S. Center for Medicare and Medicaid Services found a number of issues at the facility, including problems with patient policies and treatment plans. In June 2011, the hospital lost its "deemed status" as a Medicaid provider.

Among the problems cited were restraining and secluding patients without proper documentation, "stigmatizing" new patients by requiring them to wear medical garments and creating patient treatment plans without specific and measurable goals related to the patient’s illness.

State and federal officials later developed a correction plan. Charles Smith, the hospital’s CEO, resigned at the request of state Human Services Director John Selig, and the director of the state Division of Behavioral Health Services also stepped down.

Also, the State Hospital implemented a computerized patient treatment plan system and developed new processes for reviewing patient complaints.

In October, the federal Center for Medicare and Medicaid Services declared the state mental hospital in substantial compliance and said it had successfully met all of the terms of the action plan and had returned to "deemed status."

"You have a monumental task with some significant obstacles from day-to-day," Beebe told staff members Wednesday. "You deal with every sort of issue and problem imaginable in the health care field, in the protection field, in the therapeutic field. It is a very difficult task and you’ve come a long, long way."

Martha Gordon, the State Hospital’s employee of year, spoke of many changes that have occurred at the facility over the past 15 months, "changes that were necessary for ASH to enhance the … services for our patients," she said.

"We here at ASH worked hard. We stayed committed in our efforts to meet the terms of the system improvement agreement," Gordon said. "We had to redefine teamwork. We pulled together on each other’s strength, we set up strategies for implementing and improving all department areas, we huddled, we handed off. Together we strengthened our common goals."

Hospital CEO Steve Henson said a number of changes are in the works to further improve services and care.

"We should be held to the highest standards for we are charged with taking care of the safety net population," Henson said. "The patients who have the greatest needs."

The $32 million state facility opened in May 2008. The 130-bed State Hospital replaced a 44-year-old facility that had drawn the ire of mental health advocates who complained it was woefully inadequate to meet the needs of the mentally ill.

The 152,000-square-foot building is adjacent to the University of Arkansas School for Medical Sciences campus.