CRANSTON, R.I. (WPRI) — Eleanor Slater Hospital’s federal compliance issues have worsened slightly since the last time the issue was examined six months ago, meaning the state will continue to miss out on tens of millions of dollars in federal funding.

R.I. Medicaid Director Kristin Sousa determined the state-run hospital remains out of compliance with a federal rule designed to discourage states from warehousing psychiatric patients, according to a letter she sent to Richard Charest, director of the R.I. Department of Behavioral Healthcare, Developmental Disabilities and Hospitals, which oversees Eleanor Slater.

To remain in compliance, Eleanor Slater would have to maintain fewer than 51% of psychiatric patients compared to medical patients. Sousa said psychiatric patients currently make up about 57% of the roughly 200 people currently living at the hospital, which comprises Zambarano in Burrillville and three more units in Cranston.

As a result, she said the hospital “remains unable to claim” federal matching funds.

The snapshot measurement is taken every six months and the hospital hasn’t been in compliance officially for more than a year. But the compliance challenges date back years, as high-ranking hospital officials since at least 2012 have aggressively discharged psychiatric patients, recruited new medical patients and even reclassified one as the other in attempt to shift the hospital’s patient mix, according to a recent investigation by Target 12.

The issue came to a head in 2019 when a group of state workers raised internal concerns over billing issues and whether certain patients — some who have lived at the facility for decades — should be receiving care at a long-term acute care hospital.

Since 2019, Eleanor Slater has been embroiled in controversy, money problems and subjected to at least a half dozen reviews and investigations. Currently, R.I. Attorney General Peter Neronha is investigating patient care and Medicaid billing issues at the hospital, a probe that started more than a year ago. And the U.S. Centers for Medicare and Medicaid Services has threatened to pull other federal funding if the hospital doesn’t address a patient rights violation regulators recently identified.

Over the weekend, a group of advocates rallied at the hospital calling for change following the death of Charlene Liberty, a former Eleanor Slater patient who died in April — less than two months after she was discharged. Liberty was a high-risk patient who repeatedly hurt herself while under hospital supervision, although hospital leadership has pushed back on the idea that discharge protocol weren’t followed appropriately.

Disability Rights Rhode Island, an advocacy group with an investigatory authority, has opened a probe into the circumstances surrounding Liberty’s release.

“She was discharged, untreated and unsupported, without even the most fundamental community service she needed to, literally, stay alive,” DRRI executive director Morna Murray said in a statement last month. 

As for the federal regulatory issues tied to the hospital’s patient mix, state officials are hopeful they could solve at least part of the problem this year by carving out an existing unit called Benton in Cranston to create a standalone psychiatric hospital.

By creating a standalone agency, the state could remove dozens of psychiatric patients from the Eleanor Slater umbrella, making it less challenging to fall below the 50% threshold. Getting back below 50% would allow the state to start receiving millions of dollars in federal matching funds.

Gov. Dan McKee has proposed spending $30.5 million in general revenue to create the standalone psychiatric hospital, although his budget officials estimate most of the funding will come from existing money within Eleanor Slater. The facility also received a key regulatory approval earlier this year.

The Cranston proposal is separate from the $108 million the governor has proposed to build a new facility at the Zambarano unit in Burrillville.

Eli Sherman (esherman@wpri.com) is a Target 12 investigative reporter for 12 News. Connect with him on Twitter and on Facebook.