BANGOR – The state’s only residential facility for severely mentally disabled children has failed its annual Medicaid survey and faces the potential loss of crucial public funding.

The 20-bed Elizabeth Levinson Center on Hogan Road in Bangor has a newly appointed acting director who is working closely with the state to regain the center’s good standing with the Medicaid program, which supplies virtually all of its revenue.

The survey was conducted onsite between March 7 and March 11. Inspectors from the state’s Bureau of Medical Services, which conducts yearly surveys of residential facilities for the federal Centers for Medicare and Medicaid Services, combed through the records of four of the center’s 13 residents, chosen at random. They also observed the day-to-day care of all residents, conferred with staff and visited the children’s special education programs in local public schools. The facility serves patients from birth to 21 years.

The inspectors’ report became available late Tuesday afternoon. It identifies a small cluster of violations, including direct patient care issues such as inappropriate use of arm splint restraints, incomplete patient care plans and inadequate documentation of therapeutic treatments. It also cites a failure to notify the licensing board of in-house investigations into injuries suffered by residents, a failure to keep an emergency allergy treatment in close proximity to an at-risk resident at all times, and the presence of outdated but unopened feeding formula in the kitchen.

The center, now operating under a conditional license, has until April 25 to correct the deficiencies found during the survey. If problems aren’t resolved by then, the deficiencies will be reported to the federal Medicaid program. If not corrected by June 9, the federal Medicaid office may withdraw funding entirely.

Effective Monday morning, Mary Crichton, quality assurance manager for all mental retardation services in Maine, took over as acting director at the Elizabeth Levinson Center. Crichton said Tuesday she will be on site three or more days a week until a permanent replacement for longtime former director, Carol Trottier, is named.

A spokesman for the Department of Health and Human Services would not confirm that Trottier’s leaving the director’s position was in any way connected to the failed survey. Trottier herself could not be reached for comment.

The most frequently cited problem in the report related to the use of protective arm restraints on a particular resident, identified only as “Client 11.” Joan Smyrski, director of DHHS’ Office of Children’s Behavioral Health Services, said Tuesday that children with profound disabilities often have a strong need for oral stimulation and will chew on their fingers and hands until they’re raw. The arm restraints work like splints, preventing the child from bending an elbow to reach the mouth.

But the report faults the facility for its use of such restraints after Client 11’s hands healed, for failing to have a well-developed care plan regarding their use, and for not implementing a treatment plan that would help satisfy the child’s need for oral stimulation.

Smyrski said Tuesday that direct care staff provided appropriate care, including routine loosening or removal of the restraints and massaging the skin under them. But because the care plan did not specifically address the use of restraints, documentation was lacking.

“We were not within the limits of what [the inspectors] consider well-defined documentation,” Smyrski said.

The center also failed to notify the licensing office when three injuries were reported to the children’s services office. A bruise, an abrasion and a cut that required stitches, which occurred separately over a period of four to six weeks, were investigated and reported appropriately to the children’s services office, Smyrski said.

“But we didn’t follow through with a call to the licensing bureau,” she said. “As a department, we need to make sure the flow of information is clear and precise.”

And, in a routine test performed while inspectors were on-site, it took too long to locate a prepackaged injection of the life-saving synthetic hormone epinephrine for a child with severe food allergies.

“These deficiencies are all well-founded, and we need to address them,” Smyrski said. “We will correct all these deficiencies and do it in the timeframe outlined by the regulations.”

The Elizabeth Levinson Center does not have a board of directors. A “Human Rights and Assurances Committee,” however, does meet regularly to ensure appropriate use of restraints and other matters. Committee members are appointed by the commissioner of DHHS.

Reached Tuesday afternoon, committee chair and Bangor lawyer Angela Farrell would not comment on the licensing issue, citing patient confidentiality. She said the committee provides “a system of checks and balances,” but does not report to the commissioner or hold meetings that are open to the public.

A spokesman for DHHS said Tuesday evening that Commissioner Jack Nicholas is confident the problems at the Elizabeth Levinson Center will be corrected.