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‘Pressure from leadership’: Slater docs claim money influenced past clinical decisions

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PROVIDENCE, R.I. (WPRI) — Eleanor Slater Hospital’s top physicians claim past administrations pressured doctors to make sure the state-run facility had more medical patients than psychiatric ones, in order to keep the facility eligible for millions of dollars in federal funding.

The new revelation came to light during a Senate Oversight Committee hearing Monday, as lawmakers peppered hospital leaders with questions tied to the many ongoing problems at Eleanor Slater. Chief Medical Officer Dr. Brian Daly testified that it’s become clear to him in recent months how money has influenced the way some patients were diagnosed, admitted and treated at the hospital historically.

“That was pressure from leadership,” Daly told lawmakers. “When I got here, I was a bit stunned by the patients who were here, and that there weren’t any efforts to discharge them. Having come from other hospitals, that was pretty shocking.”

At the heart of the issue is an obscure federal regulation known as the “institutions for mental disease,” or IMD, which was born out of the 1960s to move away from institutionalizing psychiatric patients in state-run facilities.

Fast-forward half a century, and the rule has become nuanced, with its efficacy hotly contested across the public and private health care sectors. But in simple terms: Eleanor Slater cannot have more psychiatric patients than medical patients if it wants to remain eligible for federal reimbursements from the U.S. Centers for Medicare and Medicaid Services (CMS).

At stake are tens of millions of dollars in federal support, giving state officials a clear financial incentive to closely manage the patient census so that psychiatric patients don’t ever exceed medical patients.

Chief of Medical Services Dr. Andrew Stone, who works closely with Daly, put the historical way of thinking about Eleanor Slater patients more bluntly: “Medical patients equal valuable; mental patients equal not valuable.”

Daly said the potential of losing the federal funding has clearly been on the minds of hospital leadership in the past, claiming his team has discovered evidence that past protocols were manipulated to encourage medical admissions and discourage medical discharges. Daly even claimed that in some cases, patients’ diagnoses were changed — all to ensure federal funding didn’t stop.

“We uncovered lots of information that there had been efforts in the past to ensure that the ratios were always in favor of medical, but just barely so,” he said. “Everything we saw was to keep the IMD mix in a good place.”

In one specific example, Daly said Eleanor Slater transferred roughly 20 psychiatric patients to Our Lady of Fatima Hospital in 2016 after the latter facility created a long-term behavioral health unit. The reason? “Because the IMD mix was in trouble,” he said.

“That’s common knowledge, that we moved patients there in 2016,” Daly said. “I think I have emails that the IMD mix was off, or was in danger.”

The unvarnished description of managing patients for financial reasons evoked surprise and disbelief from some lawmakers. Oversight Committee Chairman Louis DiPalma, D-Middletown, called Daly’s testimony “troubling.”

State Sen. Jessica de la Cruz, R-North Smithfield, described the claims as “quite shocking,” before challenging the doctors on some of the underlying details.

“Essentially, your accusation is that these patients were kept, I won’t say against their will — but almost there,” she said. “That sounds nefarious to me.”

State Sen. Jonathan Acosta, D-Central Falls, said it was hard to deny that the IMD requirements created a financial incentive regardless of whether people have acted upon it. He also said there’s widespread agreement within the General Assembly about a desire for “accountability” at the state-run facility, which has come under intense public scrutiny in recent months.

“People want some heads to roll,” he said.

On Tuesday, Dr. Norm Decelles — who served as a physician at the hospital’s Zambarano unit for more than two decades — fired back at Daly and Stone. In an email to Target 12, Decelles called their characterization of decades of physician predecessors “both defamatory and a display of the incendiary rhetoric that has brought [Eleanor Slater] to its current unenviable situation.”

“At no time in my 27 years of state service at Zambarano did medical staff ‘manipulate data’ to keep medical patients in the hospital improperly, to preferentially discharge psychiatric patients, to keep the IMD mix in balance, or to preserve their own jobs, nor were they ever asked or instructed to by leadership, despite such claims at yesterday’s Senate Oversight Hearing,” Decelles wrote in the email.

The doctor also argued that admitting new medical patients is the only move the state can take to improve the financial viability of the hospital, claiming the hospital “has intentionally not done since before May 2020.” State officials — including Health and Human Services Secretary Womazetta Jones — have insisted to lawmakers in the past that the state did not stop medical admissions.

Gov. Dan McKee said Tuesday he was concerned about the difference of opinions between doctors who have worked at the same facility.

“It’s disturbing that there’s such a disagreement amongst professionals,” McKee said during a State House news conference. “Our job is really to zero down and determining who we’re going to believe.”

Billing remains one of the many issues currently plaguing Eleanor Slater, with the out-of-whack IMD mix presenting a major problem over the past 18 months. In 2019, Rhode Island stopped billing CMS after concerns were raised that the hospital improperly had more medical patients than psychiatric patients.

The billing has yet to resume, and the decision has since cost the state upward of $100 million in general revenue to pay for hospital costs once covered by CMS.

Hospital executives — including Daly and Stone — issued a new report last month showing 79% of the hospital’s patients are now considered psychiatric patients, a sharp increase from December when the mix was about 50-50.

While the new report further complicates whether the state is eligible for federal funding, Daly said it’s a far more accurate reflection of patients’ actual diagnoses at the hospital. Decelles pushed back on the premise, saying “Zambarano has never housed psychiatric patients.”

The analysis is now under outside scrutiny.

The R.I. State Medicaid Office and the R.I. Executive Office of Health and Human Services have hired a team from Butler Hospital to conduct an independent review of how many beds are occupied by patients with a mental diseases as a primary diagnosis. The results of that review are expected to come out by the end of July.

Asked by Acosta if the hospital would be financially viable without federal support, Daly highlighted that the General Assembly and McKee could always fund a state-run hospital entirely with state funds. But he noted that Eleanor Slater currently costs more than $500,000 per patient per year to operate.

“If the money goes away, it’s difficult to know how it goes forward,” Daly said. “It’s an expensive proposition.”

Eli Sherman ( is an investigative reporter for WPRI 12. Connect with him on Twitter and on Facebook.

Copyright 2021 Nexstar Media Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.


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