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Treatment providers say Oregon health officials’ new rule is hurting care

Cascadia Health and other residential facility operators say the state’s push to avoid a possible federal contempt order is leading to poor outcomes as well as escapes and increased violence
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The Oregon Health Authority headquarters in Salem | JAKE THOMAS/THE LUND REPORT
April 29, 2025

A group of mental health providers are accusing Oregon health officials of trying to dodge a federal judge’s contempt order by forcing their facilities to house criminally accused patients they say they are ill-equipped to care for. 

Attorneys for the Oregon Council for Behavioral Health and six residential treatment providers operating in Oregon made the claims in a petition filed earlier this month with the Oregon Court of Appeals. The petition asks the court to block a rule issued by the Oregon Health Authority that requires the residential treatment facilities to accept patients accused of crimes discharged by the Oregon State Hospital.

The new state rule requires both secure and non-secure treatment facilities around the state to set aside their normal admissions standards. Those standards are designed to ensure new patients are a good fit for the level of care provided and that the most vulnerable patients receive care. Instead, providers now must first admit any patient facing criminal charges who is discharged from the Oregon State Hospital, the state psychiatric institution where years of overcrowding have led to federal court oversight.

After years of inadequate funding for Oregon’s behavioral health treatment system, the health authority is trying to avoid a contempt order by “commandeering the operations of nonprofit-run residential treatment facilities,” the petition states.  

The health authority has not filed a response and a spokesperson declined to comment on active litigation.

Residential providers cite violence, drugs, escapes

The providers argue in the filing that they will be less able to care for people who do not face criminal charges but have been civilly committed to state care because their mental illness makes them a danger to themselves or others.

“Cascadia Health has experienced significant pressure to accept clients who are not clinically ready or appropriate for our program at the time of referral, as many have received less than 90-days of treatment, which is generally not sufficient time to enable them to become psychiatrically stable.”

The criminal defendants discharged from the state hospital to the facilities still need services to restore them to where they are considered fit to stand trial so  they can “aid and assist” in their own defense. This group “has far more rapid admission and discharge rates, extraordinarily high rates of substance abuse … and far greater incidence of violence and aggression,” according to the filing. 

“For those reasons, that patient population requires far higher staffing levels, special training for the staff who work at the aid-and-assist facility, and separation of that facility from other programs,” the petition states.

In an earlier interview, leadership of the biggest behavioral health provider in the Portland region, Cascadia Health, had refrained from criticizing the rule. However, in a declaration accompanying the motion, CEO James Schroeder wrote that since the rule took effect in early March, it has contributed to poor care as well as patient escapes, known as “elopements.”

“Cascadia Health has experienced significant pressure to accept clients who are not clinically ready or appropriate for our program at the time of referral, as many have received less than 90-days of treatment, which is generally not sufficient time to enable them to become psychiatrically stable,” he wrote. “This has resulted in discharges against medical advice, elopements, and challenging behaviors for staff and other residents.”

Providers also cite administrative headaches, added costs

Iris Sexton, an executive for one of the providers, New Narrative, noted in a filing that 100% of its “aid-and-assist” residents are actively using illicit substances, and they are responsible for seven times the rate of violent incidents as other patients.

The providers’ filing claims the rule issued by the state was improperly rushed to free up beds in the state hospital and avoid a contempt order from U.S. District Judge Adrienne Nelson that could mean fines for the state’s ongoing violations of a court order intended to prevent the unconstitutional housing of mentally ill people in jails. 

“For those reasons, that patient population requires far higher staffing levels, special training for the staff who work at the aid-and-assist facility, and separation of that facility from other programs.”

New Narrative, which oversees 13 residential facilities, received between one to 10 aid-and-assist monthly referrals before the rule but now sees as many as 54, according to court records. The nonprofit would have to spend at least $400,000 more to keep up with safety and administrative demands from the referrals, wrote Sexton.

Other state rules require Kairos Northwest to minimize risks to children in its residential facility for homeless and runaway youths, wrote Autumn Whaley, the provider’s residential director, in a filing. However, the health authority’s rule forces Kairos to ignore that requirement and  “prioritize placement of individuals that could potentially be dangerous” to the children in its care, she wrote.

The providers’ filing echoed an earlier one filed by a group of hospitals who are similarly challenging the rule. The hospitals are also suing the state accusing it of failing to provide adequate behavioral health treatment.

In response to the hospitals’ motion, the Oregon Health Authority argued the hospitals could not show they were directly harmed by the new rule. The providers’ new filing appears to counter that argument.


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

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