Mary’s guardian all but predicted the suicide attempt.

Mary, 67, had lived for six years at a locked facility in Medford, where she received close supervision from trained staff for her schizoaffective disorder.

But last year, the state of Oregon said Mary no longer needed such intensive care and must move out. The guardian worried Mary, who had a long history of suicide attempts, would fall apart without safeguards. She pleaded with health officials to keep a close watch over Mary, whose full name is not being published to maintain her privacy.

“Who knows what irreparable damage could be done!” the professional guardian, Nancy Doty, wrote in an email. “That’s no hyperbolic idea or stretch of the imagination.”

The guardian’s warnings bought Mary six months. But then she had to go.

Not long after moving into a new facility with less oversight, Mary allegedly set fire to the kitchen. Mary believed she was “Satan” and needed to kill herself, the seven other residents and a caregiver because she was “living in hell,” according to a Grants Pass police report from March.

“I understand the impulse to get people back to an independent life. That’s everybody’s wish,” Mary’s guardian said. “What I don’t understand is ignoring the history.”

“I just bang my head against the wall.”

Urged by principles of independence enshrined in federal civil rights law, the state of Oregon has been trying to move people like Mary into less-restrictive psychiatric care or independent settings since 2016.

The stakes are enormous. Keeping someone for too long in a restrictive facility strips individual independence and wastes taxpayer money. But moving vulnerable Oregonians too soon or without the necessary support can trigger severe consequences, from suicide attempts to violent crimes.

And that’s just what happened.

An investigation by The Oregonian/OregonLive found that the Oregon Health Authority botched its effort to move people with mental illness out of specialized facilities, failed to adequately monitor the program until after public scrutiny and pressed ahead despite clear warning signs that vulnerable people were in harm’s way.

The result?

Three years and $7.6 million in, the state has made little progress toward a core goal of reducing how long people stay in locked psychiatric facilities. The state manager overseeing the program was fired. The state is looking to replace the company it hired to make determinations about who qualifies for less-intensive care. And the state rejected about half of the company’s determinations after The Oregonian/OregonLive first exposed problems last fall.

To piece together how badly Oregon’s program went wrong, the newsroom reviewed thousands of pages of state, federal, medical and internal company records and interviewed two dozen insiders, guardians, providers and families affected by Oregon’s attempt to reform the mental health system.

The investigation found that the Oregon Health Authority pushed its Pennsylvania-based contractor, Kepro, at virtually every step. State officials deliberately wrote policies making it easier to move vulnerable Oregonians into less supportive care, kept rules they knew could cause serious harm and failed to question Kepro determinations until it was too late.

Medication cups, left, and the top of a small telephone table where phone calls can be made inside McCarthy's Place, a group home for people with mental illness in Northeast Portland. McCarthy's place is operated by Cascadia Behavioral Healthcare. June, 2019 Beth Nakamura/Staff

Among the newsroom’s findings:

Kepro faced staffing challenges in Oregon and the company’s predecessor agreed to pay millions to settle several high-profile lawsuits. State officials didn’t look into the company’s local predecessor, APS Healthcare, when they hired Kepro. Just weeks later, agency leaders recorded “serious concerns” about the company’s ability to meet contract obligations but pressed ahead.

Oregon stopped requiring use of a nationally accepted scoring system to guide care decisions. Health officials removed the requirement from Kepro’s contract, giving more latitude to the company and, according to one expert, helping Oregon fulfill its “agenda” to empty beds.

The agency approved stringent rules that excluded all but the most critical patients from locked psychiatric facilities without asking experts whether they would work. State officials later acknowledged the change was a mistake but spent three months working with lawyers on a fix as patients faced displacement.

Oregon raced to achieve aspirational targets for moving people out of facilities and, in doing so, ignored warnings that vulnerable Oregonians would be harmed. The state also failed to ensure appropriate support and housing for individuals forced to move.

State officials have yet to conduct a wholesale examination of Kepro’s work and share results publicly. The state said it does not know how many people moved into lower levels of care after a Kepro determination or how many of them have been harmed. The Oregonian/OregonLive has identified five who were hospitalized or arrested after leaving a facility.

Chris Bouneff, director of Oregon’s branch of the National Alliance on Mental Illness, said the newsroom’s findings are “disturbing.”

“We don’t have many others who look after us,” Bouneff said of people with severe mental illness. “And if that state agency can’t do it, and it didn’t do it in this instance, who can we trust?”

The backyard, left, at McCarthy's Place, a group home for people with mental illness in Northeast Portland. At right is a sign on the wall of the plant room. McCarthy's Place is operated by Cascadia Behavioral Healthcare. June, 2019 Beth Nakamura/Staff

Officials at the Oregon Health Authority acknowledge many problems with their effort to reform the system. But they say improvements have been made and more are on the way.

Since taking over the agency in September 2017, Patrick Allen allowed many people to remain in facilities after a Kepro determination that they didn’t qualify for care, and he secured $3 million from the Legislature to pay for it. Officials say Allen also ordered the agency to slow Kepro’s work but agency employees failed to get that message to the company.

“The director heeded the warning signs and took action to prevent people from being put in harm’s way,” agency spokesman Robb Cowie said in a written statement.

Kepro said in a statement it did not drive Oregon policy and made determinations based on state rules. Kepro said state policies “were not supported by adequate investments in care infrastructure.”

To be sure, some people have moved safely into lower levels of care following state action. Officials said they also adopted new oversight measures in December for Kepro that will apply to future contractors tasked with evaluating patients’ needs.

From top left, going clockwise, Arbor Place, Cognitive Enrichment Concepts, Rita May Manor and Faulkner Place. May 29, 2019 Beth Nakamura/Staff

“I can commit that we’re doing everything we can to make sure that the full system of care is there,” Allen said in an interview.

“Can I say that we’re never going to have a bad outcome?” he added. “No, I can’t.”

‘Serious concerns’

Oregon for years has kept people in psychiatric facilities long after they were ready to be more independent.

An analysis from 2010 found that about 60 percent of a sampling of people in Oregon’s residential facilities were ready to leave. Oregon’s inability to move people reached a breaking point this month when a Washington County judge found the state in contempt of court for allowing people with severe mental illness to languish in jail because beds at the Oregon State Hospital were not available.

Unnecessary care is expensive.

Oregon pays about $345,000 a year to keep someone in the Oregon State Hospital, the highest level of psychiatric care. The cost to the state is just $6,000 if the person lives independently while getting treatment from a team of mental health professionals in the community, according to a federal report.

Oregon’s failure to move people out of restrictive facilities prompted the U.S. Department of Justice and the state in 2016 to set ambitious goals to reform the mental health system, resulting in a three-year initiative called the Oregon Performance Plan.

“Every person deserves the opportunity to strive for as much independence and self-determination as possible,” said Sarah Radcliffe, an attorney for the advocacy group Disability Rights Oregon. “Oregon should be ensuring that people can live as independently as they’re able.”

State officials turned to Kepro in 2016 to meet federal Medicaid requirements and to help unclog the mental health system. Kepro was to review medical files for about 2,200 people with severe mental illness each year and decide which individuals no longer qualified to receive their current level of care under Medicaid. The Oregon Health Authority would then decide to act on Kepro’s determination.

“It all sounded great in theory,” said one state employee from the Kepro project, who requested anonymity because the person fears retribution. “It kind of imploded.”

Oregon’s rush to push people down the ladder of care meant state officials missed warning signs.

Kepro’s Oregon branch had been part of a foundering company called APS Healthcare. That company had been accused in lawsuits of bilking the federal government. Prior owners of the company claimed in a lawsuit they filed that it was “unraveling,” in a “downward spiral,” and “buried under an avalanche of complaints.”

APS separately settled suits between 2011 and 2015 filed by the states of Missouri and Georgia for at least $20 million, with the latter agreement requiring five years’ of strict federal oversight. The company’s value dropped 86 percent in the two years before Kepro bought it in 2015, according to corporate financial records.

The application Kepro submitted to Oregon officials in 2016 listed its legal business name as APS Healthcare Quality Review, Inc., records show.

Kepro’s chief operating officer, Meghan Harris, told the newsroom that Kepro and APS were distinct companies. All of APS’ legal issues stayed with the prior owners, she said, and none of that company’s problems were relevant to Kepro’s work or its capabilities.

Kepro “worked diligently” to address the federal government’s concerns that originated with APS’ prior work, Harris said, and the required oversight ended.

Employee turnover in APS’ Oregon branch spiked to 35 percent in 2015 from 5 percent in the previous year, and morale was low, according to sworn statements by Kepro’s chief executive in an Oregon court that year about a different contract involving APS.

“There is a loss of productivity, substantive knowledge and continuity of care that results from employee turnover,” the executive, Joseph Dougher, wrote ten months before Kepro began its contract with Oregon.

State officials should have uncovered and considered those issues as part of regular due diligence before selecting a company, said Darwin Hindman, an attorney specializing in government contracts and a lecturer at Vanderbilt University.

“The real failure in this case was in their decision not to ask the right questions on the front end,” Hindman said.

In a written statement, the health authority told The Oregonian/OregonLive that officials can hire based only on information companies provide in their applications. The health authority said Kepro submitted multiple references from state, federal and corporate officials with its proposal.

At the time, the state’s application process did not ask detailed questions about past contract failures or financial struggles.

The state’s chief contracting official said APS’ history should have raised red flags.

“If I was made aware of those issues, I would have paused to do more inquiry,” Debbie Dennis said in response to The Oregonian/OregonLive’s summary of the company’s history.

Kepro fixed the local turnover problem after some “administrative changes,” Harris told the newsroom. Kepro told the state about the federal government’s prolonged scrutiny of APS, Harris added, but she did not specify when that occurred. Kepro also gave health officials the results of an independent audit of Kepro’s local branch, she said.

The company’s application for the contract, obtained through a public records request, did not mention APS’ troubles.

The newsroom did not find evidence that APS’ problems bled into Kepro’s work.

But Oregon officials quickly started to doubt if the company could do the work spelled out in the $27 million contract, with about $7 million specifically earmarked for reviews of patients’ medical needs.

Kepro failed to hire half a dozen clinicians it said would be on board when the contract began July 1, 2016, according to state records.

“OHA has serious concerns with respect to Kepro’s ability to deliver the contracted services,” a health official wrote to the company Aug. 15, 2016, a mere six weeks into the contract.

Harris responded nine days later by saying “the hiring of staff remains our top priority.”

Harris later disputed staffing problems in comments to the newsroom but acknowledged early setbacks, attributing them to the complex roll-out of a new program. Both Harris and a spokeswoman for the state, Saerom England, said the company addressed all of Oregon’s concerns within a year.

“This happened more slowly than we wanted it to,” Harris said in a written statement, “despite our best efforts.”

Matthew, who has schizophrenia, is currently in-patient at Oregon State Hospital. June18, 2019 Beth Nakamura/Staff

‘Build on the positive’

Complaints soon followed the state’s efforts to reduce care.

Some guardians and mental health professionals protested loudly, with a clear warning in at least one case that a patient would likely struggle to live independently.

That patient was Mathew, a 36-year-old diagnosed with schizophrenia in his 20s. Mathew often insisted he had no mental illness and refused to take his meds, becoming paranoid and violent as a result, according to Oregon State Hospital evaluations.

Mathew’s professional guardian, Doty, requested that her client be identified only by his first name to protect his privacy. But she agreed to share his story to spotlight a system she believes works against vulnerable people.

Doty helped secure a spot for Mathew in the state hospital in 2016 after he was tasered and arrested for allegedly attempting to assault a Jackson County deputy. Mathew was later approved to move into a locked residential facility, one level below the state hospital.

A four-person state hospital team concluded that’s where Mathew most likely would be successful, according to medical records. Kepro also said he was eligible for that level of care, the documents show.

But the Oregon Health Authority said it couldn’t wait indefinitely for a bed at a locked facility to become available, a spokeswoman told the newsroom. Mathew had to leave the state hospital.

Kepro determined Mathew could manage living in an even lower level of care, giving him the independence he desired, records show. But a Jackson County case manager was adamant Mathew move only to a locked facility and “not return to community,” according to emails from the time.

Mathew’s guardian expressed similar concern. In December 2016, she fired off an email to seven state employees and a Kepro clinician, Debra Brooks, urging them to reconsider.

“It is cruel to put him back into situations that have been tried and failed on numerous occasions,” wrote Doty, Mathew’s guardian.

Facilities that could have provided support would not accept Mathew due to his past behavior, records show. His only option was an apartment in the community with outpatient treatment and check-ins from state hospital staff, according to emails from the time.

He moved March 1, 2017.

Twenty days later, Mathew stopped regularly taking clozapine, an antipsychotic used to treat schizophrenia. People with schizophrenia who stop consistently taking the medication risk severe psychosis, a psychiatrist told the newsroom.

Mathew was in danger, his guardian wrote in an email to Kepro.

“This is exactly what we knew would happen,” Doty wrote.

Kepro had expected Mathew to stumble, too.

“You’re right Nancy, we all knew he’d probably not follow the discharge plan as close as he promised,” Brooks, the Kepro clinician, wrote the next day. But Brooks insisted Mathew’s occasional use of clozapine was a good sign.

“Let’s try to build on the positive,” Brooks wrote March 22, 2017.

Since the move, Mathew has been evicted from his apartment and has spent months either homeless or in jail, according to court records. A psychologist who interviewed Mathew in jail found him to be “significantly psychotic.”

“This is a typical story. Textbook,” said Salem psychiatrist Satya Chandragiri, who was not involved in Mathew’s case but learned of his details from The Oregonian/OregonLive. “You stop the medications or you take them intermittently, you will have symptoms within a few months.”

Oregon health officials told the newsroom that Mathew declined help from county case managers. People with mental illness have a right to refuse care and to live independently, the agency spokeswoman, England, said.

“This was a difficult situation that our staff navigated with integrity and compassion, while we acknowledge the options they had were not ideal,” she said.

Brooks, the Kepro clinician, did not respond to questions about Mathew’s case.

Harris, Kepro’s chief operating officer, declined to comment on Mathew’s experience, citing company policy and federal laws protecting patient privacy. She said Kepro’s determinations on eligibility for care are based on state criteria and the health authority has final say on who is discharged.

Mathew is now back at the Oregon State Hospital. He is taking medication and receiving treatment until he is mentally fit to face misdemeanor charges for allegedly groping a Starbucks manager.

The seclusion room at Oregon State Hospital in Salem. Patients can be held there for up to four hours, said Greg Roberts, superintendent of the state mental hospital. A tour of Oregon State Hospital, November, 2015 Beth Nakamura/Staff LC- StaffLC- Staff

Mathew told The Oregonian/OregonLive during a face-to-face interview that he’s been punched several times by other patients and often spends his days lying in bed.

“I’m kind of disappointed,” Mathew said, sitting in the hospital dining area on a rainy May afternoon. “And I’m kind of scared.”

‘Lost time’

State officials were stuck. They weren’t pleased with Kepro’s progress and they faced federal deadlines to make changes in the mental health system.

In March 2017, they turned up the heat to move more people out of psychiatric facilities.

Oregon wanted to meet targets for the state hospital and locked facilities as early as that summer, wrote Chad Scott, the former state employee who managed Kepro’s contract and criticized agency managers for their leadership.

“We’re strategizing ways to make up for lost time from the past few months of low performance,” Scott wrote in an email to colleagues, referring to the Kepro contract.

Kepro agreed to assign more staff to review whether patients were in the right level of care. State officials also asked the company for a written plan for reducing average length of stay in locked facilities.

The state reminded the company that its contract promised a bonus for people discharged from a locked facility, up to $10,000 per month.

In response, Kepro produced a one-page plan. It would “improve the vacancy rate” across residential facilities by reviewing the medical needs of patients in licensed residential care.

The plan was not based on “scientific evidence,” the company told Oregon.

Meanwhile, Oregon officials pushed out new standards that backed up what Kepro was doing.

Kepro started applying extremely stringent criteria, developed by an out-of-state corporation, to allow patients to remain in some unlocked facilities, records show. The criteria required an individual to have at least one example of dangerous symptoms in the prior week, such as psychosis, self-injury, thoughts of murder or suicide, paranoia or sexually aggressive behavior.

Oregon separately made it harder to remain in or move into locked residential facilities, according to state records and interviews. To qualify for care under rules the state drafted in April 2017, patients needed to have a documented crisis in the past 15 days.

In an interview, Kepro’s local medical director, Jeffrey McWilliams, said there are no national standards for locked residential facilities, so Oregon provided them instead.

George Fussell, medical director for multiple Oregon treatment facilities, said the standards were arbitrary. Speaking for himself and not for his employer, Fussell said the two-week cut-off could inappropriately deny care to vulnerable people. In fact, the state’s standard for how long a person must be stable has changed twice in the two years since, from 15 days to 30 to, now, 90 days.

“There’s nothing magical about 15 days,” Fussell said, adding: “What if somebody’s doing better but not well enough?”

The "plant room" inside McCarthy's Place, a group home for people with mental illness in Northeast Portland. McCarthy's Place is operated by Cascadia Behavioral Healthcare. June, 2019 Beth Nakamura/Staff

The number of Kepro determinations that people didn’t qualify for services started to surge in late summer 2017, according to two former Kepro employees.

Ana Maria Fernandez recorded Kepro’s care determinations of eligibility for care into a state database. Fernandez said she questioned the thoroughness of Kepro’s reviews. “They were overloaded,” she said.

Fernandez said she was so alarmed by the number of ineligibility determinations that she asked Kepro’s mental health program manager, Brooks, if they were made in error. Brooks didn’t give her a clear answer, Fernandez said.

Tammie Young, who did similar work to Fernandez, said she also had concerns about how staff made determinations to approve or deny Medicaid eligibility.

“I would ask them on occasion to visit people, because they’re supposed to do that,” she said. “But they didn’t have time.”

Brooks did not respond to summaries of either of the former employees’ accounts. Harris, Kepro’s chief operating officer, said the former employees’ statements were inaccurate. She said “the vast majority of requests for all levels of care” were approved.

State officials did not know what to do with the surge. Records show that Oregon was unprepared to field about 300 Kepro determinations that people didn’t qualify for care through October 2017.

Health officials struggled to figure out who was responsible for moving people into new settings and how it would be done safely. They fielded complaints from providers and county health officials who worried about changes to patients’ care.

State officials did recognize that people with mental illness could be harmed if they weren’t moved out safely. They decided to keep hundreds of people in facilities, even if Kepro said they didn’t qualify, until a lower level of care was available. They also considered the potential public-relations fall-out.

In an October 2017 email among 11 officials, they recognized that move-outs “may risk a client decompensating from disruption of residential services.”

But Oregon and Kepro pressed on.

A former highly placed Kepro employee said the company’s workers weren’t responsible for what happened to patients once they left.

“We all understood here that the whole goal here was to move people out,” said the former employee, requesting anonymity to protect the person’s current job. “Ultimately, it was up the communities to find a placement for them.”

Oregon took one other step that fall giving Kepro more latitude when determining who was eligible for treatment under Medicaid.

State officials originally required Kepro to consider a nationally recognized tool when making treatment determinations, known as LOCUS, or the Level of Care Utilization System for Psychiatric and Addiction Services. Used in at least 26 states, it relies on extensive and detailed medical and social information to score patients and determine what type of facility will help long term.

But Oregon had an abrupt change of heart, deciding that Kepro no longer had to consider that scoring system for most types of residential facilities. Kepro’s own evaluations, which included assessments approved by the state, would suffice, the agency wrote in a memo at the time.

The health authority made the change in response to providers’ concerns that the tool was too burdensome, an agency spokeswoman told the newsroom. It’s not clear if Kepro continued using LOCUS, but the state said that for most facilities, the company didn’t have to. Kepro said it has “always used LOCUS.”

Wesley Sowers, the University of Pittsburgh Medical Center psychiatrist who developed the scoring system, said Oregon was likely trying to make it easier to move people out of facilities.

At the request of The Oregonian/OregonLive, Sowers reviewed the state’s locked facility criteria from the time and the plan for moving people. He concluded that Oregon probably removed the tool because it got in the way of the state’s “agenda” to empty beds.

The tool “is more likely to detect complexities that would, in fact, probably not reduce the length of stay,” Sowers said. “One way to remedy that is to remove the obstacle.”

A resident inside McCarthy's Place, left, a group home for people with mental illness in Northeast Portland. At right is the door to a resident's room. McCarthy's Place is operated by Cascadia Behavioral Healthcare. June, 2019 Beth Nakamura/Staff

Crisis reaches boiling point

The state’s crisis crescendoed a few months later, when the agency’s director got wind of a brewing internal battle over Kepro’s work.

Some agency employees wanted to slow down Kepro’s work, according to emails obtained by The Oregonian/OregonLive. But Scott, the contract administrator, defended Kepro and blamed the crisis on the “absolute failings” of other divisions within his state agency.

There were “literally dozens” of projects the agency had already paid for that could “resolve our current dilemma but are simply not being done,” Scott wrote to two agency managers in December 2017, calling for more community treatment and housing.

Scott took his concerns directly to the state’s top health official, Allen, in a desperate six-page email.

Allen then personally tried to impose order on the chaos. In perhaps his most aggressive move, Allen directed staff to put the brakes on Kepro’s reviews, the agency said. He alerted his boss, Gov. Kate Brown, that the program faced serious problems.

But Allen’s directive to slow down went unheeded, officials say. In fact, six days after Scott warned Allen that the program was collapsing, Scott personally intervened to ensure one Kepro determination moved forward.

That case centered on a 48-year-old man with schizophrenia.

The man had amassed at least 20 suicide attempts, causing brain damage and burns to half his body, according to court records. In 2017, he walked to a school with a knife, according to medical records, intending to commit suicide by cop.

That same year, Kepro told the state the man was stable and no longer qualified to live in a locked facility east of Portland.

The man’s father was perplexed.

Richard, an engineer who requested that he be identified only by his middle name to maintain his son’s privacy, fought Kepro’s determination in administrative court. Richard’s wife, who is their son’s legal guardian, filed a formal appeal.

Scott, the state contract manager, testified in defense of Kepro’s work during an administrative hearing. A judge ruled Oregon’s decision could not be supported, however.

Kepro had used only vague state regulations that made no mention of locked residential facilities, court records show. Neither the company nor the state could show evidence of “any other criteria,” according to the judge.

The man’s history of suicide attempts and substance abuse meant that he “needs the structured, secure environment” of a locked facility, the judge determined in February 2018.

Neither Kepro nor the Oregon Health Authority would address the case. The man’s guardian did not sign a release allowing them to comment. Kepro’s chief operating officer, Harris, said the company does not comment on individual cases.

But state officials did respond to the judge’s ruling and at least one other defeat in court by putting strict standards for locked facilities into administrative rules. To remain in locked care, residents needed to fulfill 11 separate criteria, including evidence that the person needed round-the-clock supervision.

Records show the health authority sought feedback from just one person before enacting the rules: Kevin McChesney, executive director of the state’s primary provider organization at the time, who proactively went on to share the criteria with 36 other members.

The health authority didn’t have to follow a formal process requiring public feedback because the rules were temporary, an agency spokeswoman said.

McChesney told the newsroom that the proposed criteria state officials sent him “did not seem unreasonable.” But the rules adopted by the state were far more restrictive than the ones McChesney blessed, state records show.

McChesney said that had he known, he wouldn’t have signed off because at least one of the new requirements created a “clear risk of harm or rehospitalization.”

The agency did not respond to questions about the discrepancy between the version McChesney got and the criteria that became official.

In Grants Pass, a facility manager warned the health authority in June 2018 that the residents in his locked facility risked “grievous harm up to and including death” because of the new standards.

“The system is spinning toward implosion,” Mark Johnstun warned the state.

In fact, the state’s contract administrator, Scott, also considered the new rules severely flawed.

“The new rule was poorly written,” Scott wrote in July 2018 to eight other agency employees, “and includes criteria that generally cannot be met.”

Scott suggested that an emergency repeal could be necessary. But officials continued using the criteria to move people out. The agency worked with lawyers, making a fix three months later.

By then, Oregon had already applied the new criteria to try once more to remove Richard’s son from care. Richard and his wife again appealed. A judge again ruled against the state, finding the man would “more likely be a risk to himself” outside a locked facility.

It was a relief, Richard said, but not one that lasted long.

In April, the state once again told Richard’s son that he needs to move, according to records provided by the family.

“My wife and I wonder,” Richard said, “‘Do they have something out for us?’”

Richard and his wife have appealed.

‘Awfully aggressive’

In the three years since hiring Kepro, state officials have yet to meet the goals spelled out in their agreement with the U.S. Department of Justice or to fully examine flaws within the program.

A resident sits on a couch in a common area inside McCarthy's Place, a group home for people with mental illness in Northeast Portland. McCarthy's Place is operated by Cascadia Behavioral Healthcare. June, 2019 Beth Nakamura/Staff

Oregon’s latest numbers show about 1,000 people with severe mental illness live independently in supported housing, roughly double the number from three years earlier, a significant increase. But the goal was 1,355.

Meanwhile, 48 percent of civilly committed patients deemed ready to leave the state hospital were out the door within 25 days, compared to 41 percent three years earlier. But the goal was 85 percent.

Oregon made no progress on some other key measures, including the average length of stay for civilly committed patients in locked facilities and the frequency of trips to the emergency room by people on Medicaid with severe mental illness.

Allen, the health authority director, said the goals may have been “awfully aggressive.”

It’s too early to judge Oregon’s progress, the U.S. Department of Justice said. Oregon’s goals were intended to spur structural change.

“Individual metrics of the plan cannot be looked at in a vacuum,” spokesman Kevin Sonoff said in a statement.

While Oregon has diligently reported data the federal government expects, the state has not analyzed the specific outcomes of the work it hired Kepro to do.

The Oregonian/OregonLive in November 2018 found that three people had come to harm, including one man airlifted from eastern Oregon to a Portland hospital after he stopped taking medication and drank bleach.

The outside entrance to a section of McCarthy's Place, left, a group home for people with mental illness in Northeast Portland. At right is the door to a resident's room. McCarthy's Place is operated by Cascadia Behavioral Healthcare. June, 2019 Beth Nakamura/Staff

Disability Rights Oregon also pressed the state about its program last year. In response, the agency created a first-ever analysis of discharge outcomes that it says will be regularly updated. But the initial review examined only one year of data and included all patients who moved out without specifying those linked to Kepro, obscuring project outcomes.

To this day, the Oregon Health Authority says it does not know how many people in the past three years have been moved to a lower level of care after a Kepro determination.

The agency last year said 523 facility residents were told they didn’t qualify for their level of care over a 12-month period ending last fall, and that 93 of them moved down. But state officials have also said Kepro’s work led to more than 200 step-downs from locked facilities.

Meanwhile, Harris, Kepro’s chief operating officer, said the state followed through on only 6 percent of Kepro’s determinations that someone didn’t qualify to be in a locked facility. That number does not include people discharged after getting an extension.

Oregon’s review last fall did not specifically focus on the health outcomes of Kepro’s work, England, the agency spokeswoman said, because the agency cares about “the entire Medicaid population.”

Bouneff, Oregon’s leading advocate for people with mental illness, said the decision is “nonsensical.”

“It’s akin to saying we’re not going to measure the performance of a specific hospital because we care about all people that go to all hospitals,” he said.

‘Make sure we get it right’

State officials say their most recent actions should inspire confidence that the program will be a success.

The agency in December completed a three-month investigation into Scott, the state employee who managed Kepro’s contract. Officials fired him.

Their investigation concluded that, among other things, Scott ignored orders to tell Kepro to slow down its reviews, disparaged colleagues’ work in group emails and told a manager it was his “mission to make things difficult for the agency.”

Scott disputes some of the state’s findings. He claims he was a whistleblower and his bosses tried to silence him.

A patient rests inside a calming room at the hospital. The room offers seclusion and different lighting options for patients. A tour of Oregon State Hospital, November, 2015 Beth Nakamura/Staff LC- StaffLC- Staff

Meanwhile, officials in December began scrutinizing Kepro’s determinations. They rejected at least 17 of 32. Kepro says the health authority has always had access to the company’s data.

In January, the health authority again mandated that care determinations for some residential facilities consider LOCUS, the nationally accepted scoring system.

The state also launched two audits of its mental health system, the agency spokeswoman said. One will look at Oregon’s oversight of Kepro’s work, including “assessing controls over patient safety decisions,” and the other will evaluate if Kepro billed Oregon appropriately, England said.

Oregon is now looking for a new contractor to replace Kepro.

State officials had anticipated cutting ties June 30, when the company’s contract was set to expire. But now the Oregon Health Authority has decided to extend Kepro’s contract through December because bidders seeking the state’s new contract asked for more time.

The agency is being more cautious this time around and is demanding extensive details about bidders’ history. Applications are due July 16.

Kepro won’t compete for the contract.

“It wasn’t in the organization’s best interest to move forward,” said Harris, the chief operating officer.

The state will continue prioritizing independence of people with mental illness, said Allen, Oregon’s top health official, but that won’t come at the expense of safety.

“There may be circumstances where we get it wrong,” he said. “We’re going to do everything we can to make sure we get it right.”

Have a tip about the Oregon Health Authority or the state’s mental health system? Get in touch.

-- Fedor Zarkhin

fzarkhin@oregonian.com

503-294-7674

@fedorzarkhin