PROVIDENCE, R.I. (WPRI) – Rhode Island lawmakers have nixed upward of $65 million proposed for a new skilled-nursing facility at the Zambarano unit of Eleanor Slater Hospital, saying instead they will wait until after Gov. Dan McKee unveils his future plans for the embattled health care system.

The R.I. House Finance Committee revealed Thursday its revised version of the $13.1 billion state budget proposed for the fiscal year 2021-22. The tax-and-spending plan, supported by House Democrats, includes McKee’s recently proposed amendment to close an existing $40 million budget hole at the hospital — a shortfall the governor has blamed on his predecessor, Gov. Gina Raimondo.

But the lawmakers’ revised budget would also remove more than $65 million McKee proposed earlier this year to build the new nursing home to replace the hospital’s Zambarano unit in Burrillville.

“It’s near and dear to our heart,” House Speaker Joseph Shekarchi, a Democrat, said about Zambarano. “But he hasn’t presented a formal plan yet.”

After his initial proposal in March, McKee placed a hold on his plan to restructure the hospital, saying he first needed to better understand many of the underlying issues. He’s since committed to presenting a new plan to the General Assembly before the end of June, which Shekarchi said he’d begin evaluating at that time.

McKee spokesperson Andrea Palagi on Friday said the governor looks forward to working with the General assembly leadership on the issue once Health and Human Services Secretary Womazetta Jones finishes a review of the hospital later this month. But Palagi stopped short of saying whether the governor plans to try and get more funding, of if a nursing home is still on the table.

The governor looks forward to presenting a plan to the General Assembly and working collaboratively with leadership to ensure a path forward that prioritizes patient safety and quality of care at Zambarano,” Palagi wrote in an email. “As the Governor has said, he expects Secretary Jones to complete her review of BHDDH later this month which will help inform next steps.”

The state-run hospital system has dominated headlines this year because of various controversies tied to its finances, workforce and operations. R.I. Attorney General Peter Neronha has launched an investigation into patient care and finances at Eleanor Slater. His investigation is one of at least five separate reviews currently underway there.

Earlier this week, The Joint Commission – a national health care accreditation agency – started an unannounced review. The process typically happens every three years, but it was delayed last fall because of the coronavirus pandemic. Accreditation is a key requirement to continue to receive federal funding through the U.S. Centers for Medicare and Medicaid Services.

Rhode Island hasn’t billed the federal government for reimbursements at the hospital for more than 18 months. And state officials have struggled to answer whether Eleanor Slater is compliant with Medicaid regulations. The federal government requires the long-term acute care hospital to have more medical patients than psychiatric patients, a mix the hospital has had trouble managing in recent years.

Earlier this year, the state announced it could restart billing, announcing it first planned to retroactively charge the federal government for nearly $10 million dating back to last spring. But a subsequent report came out showing nearly 80% of the patients were considered psychiatric, far exceeding the regulatory threshold of 50%.

Top hospital officials earlier this month told lawmakers the state has likely been improperly counting psychiatric patients as medical patients for years at the hospital, raising broader questions about compliance.

This week, McKee’s office said the state has narrowed its Medicaid reimbursement request to include only patients 65 years and older, a group of nearly two dozen patients of the roughly 200 currently living at the facility.

At the same time, McKee aides said the state hired a team from Butler Hospital to conduct an independent review of how many beds are occupied by patients with a mental disease as a primary diagnosis.

The group – hired at an average hourly rate of $105 per person – will also examine how many people are receiving psychopharmacological drugs to treat a primary psychiatric condition, according to a contract reviewed by Target 12.  

The contract – expected to last throughout the month – stipulates the total cost to the state will not exceed $60,000, unless otherwise amended.

During the more than year of financial turmoil at the hospital, lawmakers have become frustrated with the Raimondo and McKee administrations’ seemingly inability to get the issue under control. On Thursday, Shekarchi did not commit to allocating any more funds toward the hospital system this year.

“There’s a possibility we could be back here in the fall,” he said. “When the governor releases his plans, we will begin our review.”

Eli Sherman ( is a Target 12 investigative reporter for 12 News. Connect with him on Twitter and on Facebook.