The Oregon Health Authority is taking aggressive action to ensure people with severe mental illness aren’t forced out of state-funded residential facilities, increasing oversight of a contractor that advocates have accused of improperly discharging vulnerable patients.

State officials since December have been reviewing decisions by Kepro, a Pennsylvania-based company, in order to protect patients from potential harm.

So far, the state has reversed Kepro decisions in 17 of 17 cases.

“Clearly, there was some room for improvement as far as what OHA expected,” said Saerom England, a state spokeswoman. “This is about the care, quality and safety of residents in the mental health residential system,” she added.

Oversight of Kepro’s work follows reporting by The Oregonian/OregonLive in November and months-long scrutiny by Disability Rights Oregon. The newsroom identified three instances of serious harm to people discharged following a Kepro decision, including a 54-year-old woman with schizophrenia who was found catatonic and severely dehydrated after wandering the streets for a week.

State action comes near the end of a three-year project by the health authority that included determining if all of the approximately 1,600 people with severe mental illness in residential facilities needed to be there. The state hired Kepro, as part of a $27 million contract, to evaluate patients’ medical needs.

Those patients included about 250 people living in locked residential facilities. State officials have said at least 215 people from those facilities have had to move elsewhere after Kepro decided they didn’t qualify to stay. The state’s new oversight is limited to people who want to stay in a secure facility or move into one.

Contacted Thursday, Kepro did not directly address the state’s scrutiny or the recent string of reversals. Kepro’s chief operating officer, Meghan Harris, said in an email that the company is working to amend its contract with Oregon and believes those changes will “improve our ability to serve the state and the patients.”

The Oregonian/OregonLive last year reported that the Kepro contract and its implementation had been riddled with problems, from paperwork that violates federal law to cases of serious harm to people forced to leave a facility after the company determined they no longer qualified.

Months after Disability Rights Oregon asked the state for a tally of people who ended up hospitalized, homeless, or in jail after they were removed from facilities, state officials told the group they did not have an answer.

One of those people, Ruane Oliverio, was kicked out of a locked facility in Portland last June despite warnings from clinicians that the 54-year-old with schizophrenia was too vulnerable. After being hospitalized multiple times, she was sent to the Oregon State Hospital, the highest and most expensive level of care.

Oliverio was one of the 17 people who Kepro recently decided did not qualify to be cared for in a secure facility. Her mother was getting ready to appeal Kepro’s latest decision when the health authority told her this week that Oliverio could, in fact, move back to a locked facility.

“I’m in disbelief,” Patty Bagley-Hill said. “I want to see it in black and white.”

The state’s action this month marks a significant walk-back of comments made late last year by Patrick Allen, the health authority’s director.

“I’m confident in Kepro’s medical appropriateness reviews,” Allen said at the time. “Those professionals’ licensure and credentialing are on the line if they were to make inappropriate decisions.”

The state’s confidence appears to have waned.

Allen said Thursday that the agency now knows more about Kepro’s work than it did last year, and that “concerns have escalated."

"We’ve told Kepro we expect that they will make clinically sound decisions about whether it is medically necessary for individuals to be in secure treatment,” Allen said in an email.

State officials have now tasked three employees, including a licensed counselor and social worker, to review Kepro’s discharge decisions.

The agency wants to catch improper denials on the front end as opposed to tracking down individuals after they’ve been forced out.

“It’s a lot easier to prevent a crisis or a negative outcome,” England said.

Have a tip about the Oregon Health Authority or mental health services? Get in touch.

-- Fedor Zarkhin

fzarkhin@oregonian.com

desk: 503-294-7674|cell: 971-373-2905|@fedorzarkhin