Hospitals want reimbursement for boarding psychiatric patients

Hospitals in Oregon that are being forced to indefinitely board psychiatric patients want the Legislature to reimburse them for costs and to take steps to reduce their stays. 

But county governments and others say that what the hospitals want will push the problem elsewhere.

Legacy Health, PeaceHealth and Providence Health & Services are asking lawmakers to pass Senate Bill 140, which would increase state payments to hospitals for psychiatric patients they are housing because of a lack of beds at the Oregon State Hospital. The bill is co-sponsored by state Sen. Deb Patterson and Rep. Rob Nosse, the respective chairs of the Legislature’s health care committees. 

But groups representing counties and local mental health programs oppose the bill. They argue it will add costs and administrative burdens as the state faces a $65 million shortfall for services for people with severe mental illness — and muddy the decision-making around the care of civilly committed patients.

The dispute represents the latest tug-of-war over the state’s limited mental health resources, an issue that has also been playing out in a long-running federal court case over state hospital admissions. Recently, the litigation has turned to civil commitment patients who have been found by a judge to be a danger to themselves or others.

The hospitals’ request concerns this group of patients. In December 2019, the state hospital virtually stopped admitting civil commitment patients as it shifted its focus to patients who needed treatment to face prosecution and those deemed guilty except for insanity. 

Since then, the number of civilly committed patients at the state hospital plummeted to fewer than 20 as of May 2024, according to the hospital’s lawsuit that claims hospitals are being left to care for this population by the inaction of the Oregon Health Authority. Most of these patients are now being kept in hospitals or community health agencies.

In the meantime, the number of mentally ill people stuck in hospitals with nowhere to go has gone up. And the problem of hospitals having to board patients, including those with serious mental illness who are often homeless, has become a focus for lawmakers and others. 

Oregon hospitals have seen patients’ average length of stay increase by 27% between 2017 and 2022, while total discharge volume decreased by 10%, according to a consultant’s report. People with severe mental illness stayed in hospitals 30% longer on average during this period. 

Later in the session, lawmakers are expected to consider bills intended to address the boarding problem, by providing better case management and expanding medical respites where homeless patients can recover. 

“We are caring for the most vulnerable people in our communities, and we strongly object to being penalized for doing so,” Melissa Eckstein, president of the Unity Center and Legacy Behavioral Health Services, told the Senate Health Care Committee last week during a hearing on the bill. 

Robin Henderson, chief executive of behavioral health for Providence, told the committee that hospitals have had to house civilly committed patients for up to three years. Many are uninsured, she said, meaning the hospital bears the cost. 

Others may be covered by the Oregon Health Plan, the state’s version of Medicaid, she said. But unless the hospital has a contract with the patient’s Medicaid insurer or a coordinated care organization, it would receive a payment of only $400 a day. 

“And $400 a day doesn’t go very long in a psychiatric unit,” she said. 

Alicia Beymer, PeaceHealth’s chief administrative officer, told lawmakers that hospitals are highly restrictive settings that are not designed for  long-term care of complex patients. She said civilly committed patients can only be transferred to the state hospital if they are violent. 

The bill, which has not been analyzed for its cost, would establish daily reimbursement rates that have not been set. Additionally, it would direct the authority to maintain a registry of civilly committed patients as well as requirements for their expedited admission to the state hospital or a secure residential treatment facility. 

The state hospital and other mental health providers would also have to use a “universal interviewing process” for new patients so they would not have to repeat past trauma. The bill would also require comprehensive patient care plans that involve coordinated care organizations and county-based mental health programs. 

Cheryl Ramirez, executive director of the Association of Oregon Community Mental Health Programs, told the committee on Tuesday that her group supported increased funding for hospitals. But she added that, “We can't continue to solve for one part of the system.”

She said the bill would place additional responsibilities on community mental health programs without extra funding at a time when a recent analysis found a $65 million shortfall for services to people with severe mental illness in the state’s current two-year budget.

The bill would also create confusion about the roles of community mental health programs, coordinated care organizations and the health authority, Jessica Pratt, legislative affairs manager for the Association of Oregon Counties, told the committee in written testimony. 

Wasco County Commissioner Phil Brady, who is on the board of his county’s mental health program, told lawmakers that he is concerned there is not enough capacity to serve people found to be in danger to themselves or others. There is also the issue of paying for and arranging their secure transport, he said. 

“We’re concerned that Senate Bill 140 will do little to address capacity, while exacerbating the burden on community partners,” he said. 

The bill has not been scheduled for further action. Ramirez said her group has approached the hospitals about amending the bill to address their concerns. 

You can reach Jake Thomas at [email protected] or at @jthomasreports on X.