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The state of Oregon has a need. It faces a yawning gap of 3,700 treatment beds needed to address a crisis of mental illness and addiction that has spilled out onto the streets.
Deep in the Columbia River Gorge, Wasco County Sheriff Lane Magill has a plan. A “behavioral health campus” with recliners for short-term stays and 48 beds for longer-term treatment—a one-stop shop for people in crisis.
But despite a surge of political enthusiasm and tens of millions of dollars in state and federal grants, Magill’s plan remains no closer to fruition than a pear tree in January.
Wasco County has yet to break ground on the site, a 7.3-acre lot a short walk from downtown The Dalles. The property is currently occupied by a yellow, asbestos-laden building that contains county search-and-rescue equipment.
The project’s funding is still shy by around $30 million. And although the campus’s boosters say they still hope to open treatment beds by next year, they won’t be the sort the state expects. The mental health portion of the campus is on hold, for now, and the project’s backers say they’re switching focus to treatment of substance use disorder.
To be sure, Oregon badly needs drug and alcohol treatment too. But it’s disheartening to advocates who have long envisioned a full-fledged campus with a wide array of services.
“You need to be able to treat the entire person—all of their issues,” says Laura Dunn, a nurse who has struggled with opioid addiction herself and is on the local advisory council that’s been planning the multipurpose campus since 2019.
The plans have been altered not just because of a shortage of money, although that’s a factor. (Costs have doubled as the price of building materials skyrocketed during the pandemic.) Instead, the project has hit a new, even more intractable snag: red tape.
The problem, as strange as it may sound, is that Wasco County wants to build too many beds.
Thanks to a rule enacted more than a half century ago during the Johnson administration, federal health insurance will not pay for behavioral health treatment at facilities with more than 16 beds. The state might pay to build it, but without federal funding to run it, the project doesn’t pencil out.
The policy, which came out of the era of deinstitutionalization when asylums were mothballed and the federal government feared Medicaid would be used to resurrect them, is now hamstringing new efforts across the state to build what officials promote as “campuses.”
In the case of Wasco County, that’s three 16-bed facilities on one plot of land. Under byzantine federal rules, that’s treated the same as an asylum.
The irony of the situation is not lost on some observers.
“I get that counties are frustrated and feel like their hands are tied by an outdated federal policy,” says U.S. Rep. Earl Blumenauer (D-Ore.). “It drives me crazy.”
The chief spokesman for Wasco County’s new campus is its top cop. Sheriff Magill started as a deputy over 20 years ago and is now responsible for the region’s jail, which he says is being used as a de facto mental institution.
Sitting in his office, adorned with a gold-plated rifle and a taxidermied deer, he pulls out a stack of papers and rattles off statistics. “Frequent utilizers,” people jailed more than four times a year, are three times more likely than others in jail custody to have a mental illness. They’re more than twice as likely to abuse drugs or alcohol.
One woman with mental illness, he estimates, has been booked in jail 20 times in the past year.
“This is not working,” he says. “We’ve got to fix the system.”
Magill punctuates his pitch with tales of woe. A disabled veteran who shot himself in the head with a high-powered rifle shortly after being discharged from the hospital. A man who lost all of his fingers and most of his toes after wandering downtown in a T-shirt in 10-degree cold.
“I’ve held people in that lobby [of my office] that are weeping in my arms—shuddering and shaking,” Magill says. “They’re literally saying: Where do I go?’”
The numbers support his story. Early this year, the state counted its treatment beds. The Columbia Gorge’s entire four-county “trauma region” doesn’t have a single one. The last remaining facility closed in 2023.
In 2017, Wasco County officials and local advocates started brainstorming answers. They landed on the campus model, which had a variety of advantages. It would be a one-spot drop-off point for people in crisis. And it was efficient. Land, in the Gorge, is expensive.
Behavioral health treatment is often characterized as a “continuum”—from hospitalization to community care, with treatment for substance use disorder and mental illness along the way. A centralized campus could offer all of these services at lesser cost, they reasoned.
The county found a partner, ColumbiaCare Services, to operate the new facility. The nonprofit brought along a $9 million grant, and the county raised nearly $20 million from the state. In a recent press release trumpeting investments in behavioral health, Gov. Tina Kotek’s office treated the campus’s secure mental health treatment facility as a done deal, including the 16 beds in a total of “added capacity” by 2026.
But by then, everything was falling apart.
ColumbiaCare, citing “workforce concerns,” backed out late last year and the attached funding disappeared.
Meanwhile, state officials flagged a little-known federal rule that excludes what are known as “institutions for mental diseases” from Medicaid. Under the rule, health treatment facilities with over 16 beds can’t receive payments from the federal insurance program.
No building in the latest design of Wasco County’s campus, whose price tag by now has ballooned to $50 million, would have more than 16 beds. No matter. Because the buildings would be within 1,200 feet of each other, Magill says, Medicaid won’t pay.
The state doesn’t want to fund a project that won’t pencil out. So, “before finalizing an agreement,” an Oregon Health Authority spokesman said, Wasco County must figure out a solution. So far, it doesn’t have one.
Similarly, officials in Klamath County, who are also contemplating a campus model, face a federal roadblock. (Kendall Alexander, who’s quarterbacking that effort, declined to speak with WW amid a flurry of ongoing negotiations.)
But Magill has no problem airing his opinion. “It’s the dumbest rule I’ve ever seen,” he says.
Still, the restriction has powerful backers. Mental Health America argues that patients get worse treatment in larger facilities.
They’ve convinced U.S. Sen. Ron Wyden (D-Ore.), who said in a statement to WW that the advocacy group and others have raised “legitimate concerns” about patient safety.
U.S. Sen. Jeff Merkley (D-Ore.) was somewhat more sympathetic to the idea, saying he and his team would take “a closer look at the IMD exclusion in the context of the current mental health challenges.”
In the meantime, states are looking for ways to skirt the rule. Almost every state in the country, including Oregon, has convinced federal regulators to waive it for facilities that treat substance use disorders. But, as of last year, only 11 had done the same for mental illness.
When asked why Oregon wasn’t among them, the OHA spokesperson said the state is ineligible for the waiver because patients are spending too long in large facilities like Oregon State Hospital.
But consider this: Right now, more than 100 people in OSH are ready to be discharged with nowhere to go. They’re waiting for officials to find somewhere to send them—somewhere exactly like the campus that Magill is being told he can’t build.
The sheriff still holds out hope the county will eventually get the campus built. Magill sees it as a model, a blueprint for other campuses across the state. “I won’t give up,” he says.