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Yorkville Endoscopy, on the Upper East Side, “no longer meets the conditions for coverage for a supplier of ambulatory surgical center services," the federal Centers for Medicare Services said. "Therefore, CMS is terminating the Medicare health benefits agreement between Yorkville Endoscopy and the secretary, effective Jan. 31."
The change means the clinic will no longer be eligible to be reimbursed by Medicare and Medicaid for services provided to beneficiaries, a substantial hit to its business.
Yorkville Endoscopy has said it would appeal.
"We are continuing to work with all regulatory bodies,” the clinic said in a statement provided to ABC News. “We intend to communicate with CMS and appropriate authorities to have the decision reversed. Yorkville continues to be a licensed facility and perform procedures while cooperating with the regulatory process."
Under CMS rules, Yorkville Endoscopy can request a hearing before an administrative law judge at the Dept. of Health and Human Services to argue the termination was improper.
The clinic had faced a deadline of Jan. 7 to take corrective steps after inspectors identified deficiencies in its operation that were exposed after Rivers died. Regulators gave the clinic a temporary reprieve last week while they studied whether Yorkville took all the action it was supposed to.
They have now determined it did not.
The New York State Health Department found Yorkville deficient in four categories during a routine investigation a few days after her death. Then, the U.S. Department of Health and Human Services found a staff member photographed Rivers with a cell phone while she was sedated, improperly documented how much of the sedative propofol was used, and "failed to identify deteriorating vital signs and provide timely intervention during the procedure."
After three unannounced inspections last month regulators determined the clinic is still failing to properly document anesthesia, improperly safeguarding patient records and failing to fully address grievances filed by patients.
Rivers died on Sept. 4 at the age of 81 after going into cardiac arrest at the clinic, then being rushed to a local New York hospital, where she was treated for a week before her death.
Joan Rivers' daughter, Melissa Rivers, had no comment on the facility's loss of federal accreditation. She has hired attorneys for a possible lawsuit against the clinic.