Hospitals’ lawsuit over psychiatric admissions faces scrutiny in court

Oregon hospital systems say they’re saddled with patients who should be in the state hospital, but a federal judge questions the validity of their argument

The Lund Report – April 2023

A federal judge on Tuesday cast doubt on arguments by three Oregon health systems that state officials are illegally abandoning civilly committed mental health patients in their hospitals’ care after failing to increase treatment options.

U.S. Judge Michael Mosman, in a U.S. District Court hearing in Portland, suggested Legacy Health, PeaceHealth and Providence Health & Services lack legal standing for their lawsuit against the Oregon Health Authority because they had voluntarily agreed to take the patients.

But during the hearing both the health authority and Mosman acknowledged that a lack of state treatment facilities has put the hospitals in a difficult position, adding to the situation in which they board hundreds of patients who don’t generate revenue and don’t need hospital medical treatment.

Pressed by Mosman, Carla Scott, a state attorney representing the Oregon Health Authority, said that hospitals don’t want to discharge the unwanted patients despite being able to legally “because it’s not the right thing to do.”

“The state doesn’t want them to do that necessarily either,” she said.

Mosman replied that hospitals could do “the one thing no one wants them to do” and avoid providing continued care for patients.

The hearing is the latest in long-running litigation over a bottleneck at the Oregon State Hospital that advocates say violates the rights of people who need intensive treatment. It comes as lawmakers and state officials are scrambling to increase the state’s underdeveloped behavioral health treatment capacity and hospitals are complaining of increasing financial strain.

Exchanges between Mosman and attorneys representing the hospitals, Disability Rights Oregon and the health authority during the hearing highlighted the lack of good options in the state’s dysfunctional behavioral health system.

Disability Rights Oregon and the health authority have asked Mosman to throw out the hospitals’ lawsuit. Mosman is expected to issue a ruling on whether the lawsuit can proceed.

‘Nowhere for these patients to go’

The hearing centered on a lawsuit filed by the three large health systems in December. The suit takes aim at a sweeping order Mosman issued earlier. The order mandated a timeline for how long the state hospital could take to treat patients the criminal justice system ordered to undergo treatment.

The hospitals in the lawsuit argued the order means fewer beds at the state hospital for civilly committed patients. As a result, hospitals are forced to house civilly committed patients indefinitely in acute care facilities that are ill-suited for their treatment and in violation of their constitutional rights, according to the lawsuit.

Eric Neiman, an attorney for Legacy, outlined during the hearing how these patients come into the care of hospitals. He said each year, law enforcement or families bring more than 7,000 people who “decompensate psychiatrically” to hospital emergency departments.

Federal law prevents hospitals from discharging patients if they’ve been deemed to be psychiatrically unstable, he said. Once civil commitment proceedings begin, a “patient is no longer just a hospital patient,” he said.

“That patient is within the state’s mental health system, (and) is the responsibility of the state,” he said.

Alex Van Rysselberghe, an attorney for the hospitals, told Mosman that while each of the hospitals had earlier agreed to house civilly committed patients in their acute care facilities, none agreed to provide long-term care. He said the “worsening of Oregon’s behavioral health crisis,” tightened admissions at the state hospital and diminished resources for other treatment options meant hospitals were left to care for these patients.

“There’s nowhere for these patients to go after the point where we cannot medically do anything for them further,” Alex Van Rysselberghe said during the hearing.

Under questioning from Mosman, Van Rysselberghe said the hospitals only agreed to provide acute care to these patients.

“And you could tomorrow quit providing acute care if you decided it didn’t fit your mission anymore (and) you didn’t want to do it?” Mosman asked.

“I believe that is correct,” Van Rysselberghe replied .

Scott seized on Van Rysselberghe’s remark. She also pointed to state regulations that require community mental health program directors to get the consent of facilities before assigning them to house civilly committed people. But she also recognized the “tough situation” hospitals face.

Neiman pushed back on Scott’s argument, saying that as long as an individual meets civil commitment criteria, the hospital can’t discharge them. He called her position “surprising.”

‘Correspondence of interests’

Mosman also undercut the hospitals’ claims they were advocating on behalf of civilly committed patients stuck in their acute care.

Disability Rights Oregon in an earlier court filing called the interests of the hospitals and their civilly committed patients as being “fundamentally in conflict.” The advocacy group said in the filing that the hospitals’ argument amounted to an admission that they were poorly caring for the patients.

Mosman pointed to the hospitals’ earlier filings describing the civilly committed patients as a “headache,” who “cost a lot of money,” cause staff to quit and destroy property.

“And that starts not to sound like correspondence of interests,” Mosman said.