PROVIDENCE, R.I. (WPRI) — A newly released review of billing practices at Eleanor Slater Hospital shows the state-run facility could recoup some money dating back to 2019, but it continues to grapple with federal compliance problems.

The report was issued Wednesday by a team from Butler Hospital, a unit of Care New England, that the state hired to review billing practices and medical records at Eleanor Slater. Eleanor Slater, a publicly funded hospital, has missed out on more than $200 million in federal funding since concerns over billing practices were first raised in fall 2019.

State-run hospitals are not allowed to have more than 50% of psychiatric patients if they want to receive federal funding through the U.S. Centers for Medicare and Medicaid Services, under a rule known as the Institutions of Mental Disease, or IMD.

The Butler report — subsequently reviewed by the state Medicaid office — indicates Rhode Island could bill Medicaid for some of that lost money retroactively, but not for any services provided since May, when Butler estimates the hospital had slightly more psychiatric patients than medical patients.

The Butler report estimated 51% of the patients in May were there primarily for mental health reasons, making the hospital an IMD and putting it out of compliance. However, the report shows Eleanor Slater didn’t have any issues with compliance in December 2020 and May 2020, the prior two times when the mix was required to be checked in accordance with state Medicaid policy.

“Between April 1, 2020 and May 1, 2021, [Eleanor Slater] was not an IMD and is fully authorized to retrospectively claim [federal funding] for patient services provided during that period,” the state’s Medicaid director, Ben Shaffer, wrote in a memo Wednesday.

“However, the result of the independent IMD review supports [the] determination that the May 1, 2021 [Eleanor Slater] census for qualifying psychiatric patients was 51% of the total patient population,” he wrote, adding that means the hospital is an IMD and “therefore unable to claim” federal funding since May.

Despite the current noncompliance, Gov. Dan McKee is bullish the hospital will get back on the right track with Medicaid by the end of the year, saying Tuesday the hospital is accepting new medical patients — which could help decrease the overall share of psychiatric patients.

Unlike with medical admissions, Eleanor Slater cannot control most psychiatric patient admissions, as those people are usually ordered there by the courts as so-called “forensic patients.” The state for years has tried to manage the hospital’s census count closely to ensure the hospital remains in compliance with the rules surrounding the IMD, keeping the share of psychiatric patients under 50% — an effort that by all accounts failed in May.

“We are accepting new patients and we expect to be in a situation where we can bill and collect,” McKee said said.

The Butler report’s release is the latest episode in the ongoing turmoil at Eleanor Slater, which has a Zambarano campus in Burrillville and three more units in Cranston. The hospital system has made headlines all year for ongoing money woes, deteriorating facilities and patient-care controversies.

The McKee administration has been trying to rectify some of those underlying issues, earning a key nod of approval from The Joint Commission this week when the national agency told the state the hospital could keep its accreditation.

The Butler report also offered some support to an initial review done earlier this year by former hospital executives, who estimated Eleanor Slater had more psychiatric patients than medical patients, in violation of the IMD.

However, the Butler report’s calculation of 51% psychiatric patients in May is a far cry from the 79% reported by the former executives — adding more confusion to the contentious debate surrounding operations and billing practices at the hospital.

It wasn’t immediately clear why there had been such a disparity between the two reviews, but the Butler report and Shaffer’s analysis suggest there is a sizable group of patients at the hospital which aren’t considered “medical patients” and are also exempt from being considered “psychiatric patients.”

In May, for example, 44 of the total patients were considered “exempt” from the IMD determination.

Regardless, the share of psychiatric patients grew substantially between December 2020 and May 2021, according to Butler, as the number of medical patients decreased and psychiatric patients grew.

The Butler review is the latest in a litany of reports and reviews that have come out about the hospital under the McKee administration and the Raimondo administration before it. R.I. Attorney General Peter Neronha for months has been investigating Eleanor Slater over issues related to patient care and billing practices.

The governor has not yet indicated any final decisions for the long-term future of the hospital.

More to come.

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