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Q&A: Why Eleanor Slater Hospital has cost RI an extra $200 million since 2019

Target 12

PROVIDENCE, R.I. (WPRI) – By now, most Rhode Islanders who follow the news have likely heard about Eleanor Slater Hospital.

Whether it was a reporter talking about it on a newscast, Gov. Dan McKee fielding questions during one of his televised news conferences or a headline splashed across the newspaper, the state-run hospital has become one of the biggest problems facing Rhode Island outside of the coronavirus pandemic.

Yet the reasons why it’s such a big deal are myriad, complicated and conflicted – making it tough to follow at times, despite all the public attention. Even the governor, who is technically in charge of the hospital, is having trouble making heads or tails of what’s going on there.

“We’re certainly still in the process of [figuring out] who we believe and who we don’t believe,” McKee said last week after issuing a critical review of the hospital.

Hanging in the balance are the lives of nearly 200 patients – many with mental illnesses and complex medical needs – along with new costs to state taxpayers that now total more than $200 million since the fall of 2019, according to a recent analysis by the R.I House Fiscal Office.  

For context, $200 million is enough money to fully fund an entire year of operations at the state’s Department of Health, the Office of the Mental Health Advocate, the Office of the Child Advocate and the Governor’s Commission on Disabilities — combined.

House Fiscal staff also noted in their analysis, “We make no attempt to price the added impact of losing out on the enhanced federal match that came with the pandemic were the state to still be billing the feds, but it would have been worth millions across the three years in question.”

To help cut through some of the noise, Target 12 has compiled a series of questions and answers about the facility, along with what’s known publicly right now about its many problems.

What is Eleanor Slater Hospital?

Eleanor Slater Hospital — a division of the R.I. Department of Behavioral Healthcare, Developmental Disabilities and Hospitals (BHDDH) — is a state-run medical system that provides psychiatric services in multiple units at its Cranston campus, as well as complex medical care at its Zambarano campus in Burrillville.

Zambarano was founded in 1905 as the Rhode Island State Sanatorium, but became part of Eleanor Slater in 1994 as part of a broader merger of state institutions. Those changes coincided with the closure of the notorious Joseph H. Ladd School amid a national push toward deinstitutionalization of mentally ill patients. (More on that later.)

The hospital cares for about 200 patients across two campuses, including a power plant and a water treatment facility.

So do people go to Slater when they break an arm, like Rhode Island Hospital?

No, it’s different from your typical hospital with an emergency department.

Eleanor Slater is designed to provide care to patients with mental illnesses – most of whom are ordered there by a judge – along with patients with complex medical needs, such as brain trauma from a gunshot wound. And unlike most trips to Rhode Island Hospital, which might last anywhere from a few hours to a few days, patients stay at Eleanor Slater for more than a decade on average.

OK, so Eleanor Slater has been around for a while. Why am I suddenly hearing about it?

The hospital has dominated headlines for months because of internal strife tied to money, potential legal issues and decrepit hospital conditions – the latter of which has resulted in a “dangerous environment” for patients and staff, according to a national accrediting agency.

Meanwhile, union groups and administrators have clashed, Gov. McKee is seeking to overhaul leadership and several outside entities – including R.I. Attorney General Peter Neronha’s office – are investigating patient care and Medicaid billing practices.

Whoa, that’s a lot of issues. How did we get here?

At the root of many of the issues at Eleanor Slater is a question that American society has struggled to answer for decades, even centuries: How do we responsibly care for our most at-risk neighbors?

In Rhode Island, the history of institutions for mentally ill patients dates back to the 1820s, when the Dexter Asylum opened “to care for the sick and feeble” in Providence. In 1905, Zambarano opened as the state sanatorium for people with tuberculosis, later evolving into a version of its current self in the 1950s.

By the 1960s, a national effort was underway to push states away from warehousing patients in psychiatric hospitals. In Rhode Island, “deinstitutionalization” — as it’s known — fueled a decades-long transformation of institutions for the mentally ill that eventually led to the creation of Eleanor Slater Hospital in 1994.

Along the way, Congress decided it would not provide Medicaid funding to states for long-term psychiatric hospitals, also known as institutions for mental disease, or “IMDs.” (You’re going to hear that acronym a lot.)

However, hospitals learned they could skirt the rule and get an exemption if their facilities had more medical patients than psychiatric patients — and that has created major problems for Eleanor Slater.

What kind of problems?

Other states including Massachusetts decided against seeking an IMD exemption, instead creating standalone psychiatric hospitals paid for entirely with state money.

Rhode Island went the other way, lumping together its psychiatric operations and patients in Cranston with its medical operations and patients in Burrillville. Rhode Island is now the only state in the country without its own standalone, state-run psychiatric facility.

As long as Rhode Island reports to the federal government that its patient census across all Eleanor Slater locations shows fewer than 50% of patients are psychiatric ones, the hospital remains eligible for federal Medicaid funding from the U.S. Centers for Medicare and Medicaid Services, or CMS.

In 2019, however, the system went haywire after whistleblowers raised internal concerns that Slater had been treating far more psychiatric patients than medical patients, and massaging the numbers to remain eligible for federal money. That forced the state to stop billing Medicaid.

So where do things stand with Medicaid funding today?

The short answer: Rhode Island hasn’t billed Medicaid since 2019 and the loss of federal funding has cost taxpayers over $200 million in state revenue since then, according to a House Fiscal Office analysis.

For context, it costs $1,528 per patient per day to run Eleanor Slater. That’s almost double what a Rhode Islander making median wage earns after two weeks of full-time work (before taxes). The hospital costs an estimated $557,000 per patient each year to operate.

If that’s the short answer, what’s the long answer?

It depends how you look at it.

Some argue the former Gov. Gina Raimondo’s administration was incompetent and failed to manage the daily IMD census across Slater the way that prior administrations had, allowing the mix of psychiatric patients to go well above 50% and putting Rhode Island out of Medicaid compliance.

Others say psychiatric patients have represented more than 50% of the census for years, a fact that was well-known among state officials. Slater’s resigning chief medical officer, Dr. Brian Daly, is among those who claim past administrations pressured doctors to massage the numbers so the state would always remain eligible for the millions in Medicaid money. Other former hospital doctors have pushed back on this claim, however, and criticized its recent leadership for mismanagement.

The McKee administration has hired a team from Butler Hospital to review Eleanor Slater’s Medicaid billing practices. It’s also one focus of an ongoing investigation by Attorney General Neronha, who is likewise examining patient care at Slater.

So what’s been done since the state fell out of Medicaid compliance?

As you’d expect, members of the General Assembly were alarmed by the sudden hemorrhaging of money at Eleanor Slater once the facility stopped billing Medicaid, especially because there’s been no clear fix in sight for nearly two years now.

The issue was largely put on the backburner once the coronavirus pandemic hit in March 2020, though the underlying problem was still festering. And it has returned to the forefront of State House policy debates as the pandemic eased.

Prior to the pandemic, Raimondo hired consultants to review the hospital’s operations. They produced a plan to close Zambarano, create a standalone psychiatric hospital in Cranston, and beef up funding for community-based programs to care for complex medical patients.

That plan — which evolved in subsequent months — became the focus of intense scrutiny and criticism.

Right. Wasn’t there a lot of pushback to that plan?

A ton. And from an unusual coalition of union groups and Republican lawmakers.

Both argued that closing Zambarano would be devastating to patients there, claiming they wouldn’t be accepted outside the facility or receive the same level of care anywhere else. In addition, the Burrillville facility is a significant job center for northern Rhode Island, a more rural part of the state with fewer large job centers than other regions.

Union leaders and some lawmakers accused Raimondo of pursuing a “shadow closure” of the facility, claiming that the initial plan to shutter Zambarano was still in motion even after the governor commissioned a second report in 2020 that called for the construction of a new non-hospital long-term care facility on the Burrillville campus to replace the existing one.

Since McKee took over from Raimondo in March, he has been adamant that he has no public or private plans to close Zambarano.

What kind of condition is Zambarano in anyway?

Not good.

In addition to being cited for more than 100 health and safety violations earlier this year, The Joint Commission recently released a scathing report that found patients at Zambarano are living in decrepit buildings with unsafe conditions. One section of the report even described a dispute in which a patient was told to “go shoot yourself.”

The national accrediting agency described Eleanor Slater as a “dangerous environment” overall, and has threatened to revoke its accreditation — a key requirement to receive federal funding.

State officials have since been scrambling to fix the problems; in the initial report, an employee is quoted saying fixes only happen every three years when The Joint Commission comes into town. Representatives from the group have been back at Slater this week.

What has McKee done since he took over?

The new governor inherited a restructuring plan from Raimondo that included a proposal to build a $65 million skilled nursing facility on the Zambarano campus. He quickly hit the pause button on that, saying he needed to figure out who was telling him the truth about what was going on at the hospital.

McKee directed Health and Human Services Secretary Womazetta Jones to conduct an internal review of the hospital, which was released last week, accompanied by a leadership shakeup. The people getting pushed out include the hospital leaders who have been raising concerns about improper Medicaid billing.

The governor told reporters Medicaid billing wasn’t the main reason why they’re shaking up Slater’s leadership, pointing toward the many issues that were detailed by The Joint Commission. But Medicaid billing was a factor, he admitted, saying “if we’re entitled to get federal funding, we’re going to get it.”

What’s going to happen next?

In her review, Secretary Jones outlined a series of short- and long-term recommendations that look similar to the plan the governor hit pause on earlier in the year.

Those ideas include shutting down the hospital’s Adolf Meyer unit, creating a standalone psychiatric hospital in Cranston, and potentially building a new facility on the Zambarano campus in Burrillville.

Jones has also suggested hiring another consultant to figure out whether Eleanor Slater should be licensed differently from its current designation as a long-term acute care hospital.

McKee said last week he’s going to take the ideas into consideration and that Rhode Islanders should expect additional reports and action plans to come out in the future.

So is Eleanor Slater getting Medicaid money yet?

Nope. As of July 7, nearly two years after concerns were first raised, the state still hadn’t started billing Medicaid for non-elderly adults.

Earlier in the year, the McKee administration announced the federal government had given Eleanor Slater an initial nod to resume billing Medicaid, laying out an initial plan to recoup nearly $10 million in Medicaid dollars retroactively.

But that billing request never went through, in part because the same hospital executives now being pushed out reported that 79% of the roughly 200 patients at the hospital were there primarily for psychiatric reasons — far above the 50% IMD threshold, and an eyebrow-raising increase just since December.

Now, the Butler Hospital team is reviewing the census and past billing practices to determine the validity of the past and present patient diagnoses. The hospital is an arm of Care New England, the state’s second largest private hospital system.

Even if the state gets to a place where it feels confident enough to resume billing, however, the House Fiscal Office said there was an annual $15 million Rhode Island used to get from the feds that the state will never see again.

Apparently, Rhode Island had been billing CMS for forensic patients — people who have been ordered into Eleanor Slater by a judge — even though they are ineligible for federal funding.

“CMS has said we should never have been doing that,” House Fiscal staff wrote in their analysis.

Is anyone else looking at this?

There’s currently a lot of outside attention on Eleanor Slater, but arguably none as consequential as Attorney General Neronha’s investigation.

Neronha disclosed his examination in April, and while he isn’t divulging much information about where things stand, he hasn’t ruled out the possibility of criminal charges depending on what his attorneys find.

Separately, there is the ongoing Butler Hospital review, as well as a separate review of clinical care and operations being led by the Hospital Association of Rhode Island. Eleanor Slater is a member of the association, which is currently led by former Senate President Teresa Paiva Weed.

The Joint Commission, meanwhile, must still make a final determination on whether to revoke the hospital’s accreditation entirely. And Disability Rights Rhode Island, an independent nonprofit with some federally mandated oversight authority, is investigating the hospital’s discharge practices, among other policies.

On top of all that, and the ongoing review by Secretary Jones for the governor, the House and Senate oversight panels have both been conducting their own inquiries into the situation at Eleanor Slater.

Eli Sherman (esherman@wpri.com) 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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