PROVIDENCE, R.I. (WPRI) – A new state assessment suggests Rhode Island is out of compliance with a federal rule requiring that psychiatric patients account for below half of everyone receiving care at Eleanor Slater Hospital, raising new questions about the troubled state-run facility’s management.

A Target 12 review of the assessment, released Monday, shows psychiatric patients represent 79% of all patients at the publicly funded hospital system. That rate far exceeds the 50% federal threshold Eleanor Slater is required to stay under in order to maintain eligibility for millions of dollars each year from the U.S. Centers for Medicare and Medicaid Services.

“That’s unexpected and disappointing,” said state Sen. Louis DiPalma, chairman the oversight committee heading an inquiry into the hospital.

Rhode Island for years has struggled with maintaining the required patient mix under the so-called Institutions for Mental Disease (IMD) exclusion, a controversial federal rule created in the 1960s that prohibits federal funding for state-run psychiatric facilities.

The issue reached a tipping point in 2019 when Eleanor Slater stopped billing CMS after staff raised concerns about whether the state was in compliance. That decision has since cost Rhode Island more than $100 million in state money, as lawmakers have had to backfill costs once covered by the federal agency.

On Tuesday, R.I. Executive Office of Health and Human Services spokesperson Kerri White confirmed the facility is likely out of compliance.

“Eleanor Slater is reporting to EOHHS that they are likely an IMD,” Kerri wrote in an email. “An IMD is not eligible for Medicaid reimbursement for patients between the ages of 19-64.”

The state signaled it might be turning a corner last month when Gov. Dan McKee’s office announced a plan to recoup $10 million retroactively. The announcement came shortly after CMS approved the state’s amended billing plan that’d been under consideration for more than a year.

But the billing request never went through, and this month McKee spokesperson Matt Sheaff said administration officials changed their minds about asking for the federal money after “staff raised questions regarding the eligibility of certain expenses.” Rhode Island is now seeking outside counsel, similar to what was done by former Gov. Gina Raimondo’s administration in 2019.

DiPalma said the state’s latest assessment of the hospital’s patient mix reinforces that eligibility concerns persist.

“There was an expectation that we’d be billing and we’re not billing because we’re exceeding the IMD mix — that’s a fact,” DiPalma said.

Eleanor Slater, licensed as a long-term acute care hospital, provides both medical and psychiatric care through Zambarano in Burrillville and three more units in Cranston. As of May 1, psychiatric patients represented 92% of all patients in Cranston and 58% of all patients in Zambarano, even though the latter is technically a medical facility and has zero beds designated for psychiatric patients, according to the assessment.

The overall rate of 79% also represents a sharp increase from December when the psychiatric patients — mostly ordered there by judges through the courts system — totaled exactly 50%, according to the biannual assessment that started in 2020.

Noting the average length of stay for patients at Eleanor Slater is about 16 years, DiPalma asked, “What changed in that amount of time?”

State officials struggled to explain the sudden and sharp increase over the past five months.

“EOHHS will now review the submission to determine IMD status but cannot speculate why the census appears to show an increase in psychiatric patients,” White said.

The assessment was signed by chief medical officer Dr. Brian Daly, chief of medical services Dr. Andrew Stone and chief financial officer Jennifer White.

Kerri White said it’s ultimately up to the state’s Medicaid office to determine what happens next, and will use the outside counsel to review the three patient-mix assessments submitted since 2020.

“For these types of reviews, CMS IMD guidelines require inclusion of at least one physician or other skilled medical professional who is familiar with the care of mentally ill individuals and who is not an employee of Eleanor Slater Hospital,” White wrote.

In a March 28 memo addressed to EOHHS Secretary Womazetta Jones, state Medicaid director Benjamin Shaffer highlighted that Eleanor Slater would “no longer be able to receive” federal funding if it fell out of compliance. As health and human services secretary, Jones has oversight of both the Medicaid office and the hospital; she’s also serving as interim director of the R.I. Department of Behavioral Healthcare, Developmental Disabilities and Hospitals, which controls Eleanor Slater.

A CMS spokesperson contacted Monday asked for more time to respond to multiple questions about the assessment and how it will affect the state’s eligibility moving forward.  

Beyond its money woes, Eleanor Slater has been plagued by other controversies in recent months, including a deteriorated relationship between union groups and administrators and neglected maintenance of facilities.

Attorney General Peter Neronha has launched his own investigation into the hospital, examining both patient care and its finances. Last week, Target 12 revealed one of the hospital’s top executives dodged two layoffs and continued to receive his $226,000 salary, even though records raised significant questions about his job status.

Separately, DiPalma is locked in a fight with EOHHS over legal documents, and both his committee and the R.I. House Oversight Committee have held hearings focused on problems at the hospital.

On the other side of the aisle, Sen. Jessica de la Cruz and Rep. David Place, both Republicans, have likewise raised concerns about the state-run facility and its future, arguing the state must develop a plan to protect patients and Zambarano in the short- and long-term.

“This certainly brings up more questions to be asked,” DiPalma said.

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