Montana State Hospital: Decertification, Staffing, and Lawsuits

Montana State Hospital, the state’s only public psychiatric hospital for adults, has operated without federal Medicare and Medicaid certification since April 2022, when the Centers for Medicare and Medicaid Services terminated its agreement after a series of preventable patient deaths. More than four years later, the hospital at Warm Springs is still treating patients, still relying heavily on contract nurses, still cycling through leaders, and still working to pass a federal survey that would restore roughly $7 million a year in lost funding.¹

What the Hospital Is

The facility sits in Warm Springs, in Deer Lodge County, and is licensed for 270 beds: 174 hospital beds, 42 adult group home beds, and 54 forensic mental health beds.² It provides inpatient psychiatric evaluation, medication management, individual and group therapy, rehabilitation, chemical dependency treatment, and peer support. Admission is limited to people whose needs exceed what community mental health services can handle.³ The forensic unit is the only place in Montana authorized to involuntarily medicate criminal defendants found mentally unfit to stand trial.⁴

Why It Lost Federal Funding

Between January 2021 and February 2022, four patients died from causes federal investigators later deemed preventable, including COVID-19 infections and serious falls. CMS inspectors arrived in February 2022 and cited the hospital for three areas of noncompliance: no COVID-19 infection control plan, inadequate protection of patients from serious falls, and infractions involving the use of psychotropic medications.⁵ The agency placed the facility on “immediate jeopardy” status. Follow-up inspections in late February and on March 9 found the problems uncorrected, and a late March visit added a new citation after a male patient assaulted a female patient, for failing to ensure patients were “free from abuse.”¹

CMS sent an involuntary termination letter to the Montana Department of Public Health and Human Services on April 8, 2022. Federal reimbursement for new patients ended on April 12.¹ Behavioral health expert Ben Miller, speaking to NPR, said the roughly two-month path from first inspection to termination was unusually fast.⁶

Patient Harm Before and After Decertification

Federal investigators tied the four pre-decertification deaths to staffing failures and safety lapses. In one case cited by CMS, a patient who said she could not breathe was told by staff to “stop being so dramatic”; she died 45 minutes later.⁷ Between April and December 2022, after certification was pulled, the state itself reported six more patient deaths, five severe injuries requiring hospitalization, and eight substantiated reports of abuse and neglect.⁸

Disability Rights Montana, the state’s federally designated protection and advocacy organization, published a 2022 report titled “The Yellow Bags” documenting the hospital’s practice of discharging patients directly to homeless shelters. Staff would “cold drop” patients at shelters around the state, handing them a yellow drawstring bag with medications and often inadequate paperwork. Shelters reported the hospital rarely called ahead to confirm bed availability. The report documented cases in which patients were told housing had been arranged when it had not, and former patients who disappeared or died after being discharged to the streets.⁹

The Staffing Collapse

Behind the regulatory failures was a workforce that had been thinning for years. By December 2021, 40% of the hospital’s 524 full-time positions were vacant.¹⁰ Full-time staff dropped from roughly 450 in 2019 to under 350 by late 2021.¹¹ At times, a single registered nurse was responsible for 30 patients.

The hospital filled gaps with contract and travel nurses. By early 2022, an estimated 70% of nurses were contract workers earning $80 to $90 an hour. Contracted nurse assistant hours jumped from 2,000 in January 2021 to 16,000 in December 2021.¹¹ By April 2024, the vacancy rate was 33%.¹² In 2025, the legislature cut approximately $35 million over two years for contracted nursing services, and the hospital ended 40 travel nurse contracts. Staff warned that the cuts came before enough permanent employees had been hired to fill the gaps.¹³

Lawsuits

In November 2023, the estates of two deceased patients and the guardian of one current patient filed a federal lawsuit against Montana, Governor Greg Gianforte, DPHHS, and hospital administrators. The case was assigned to District of Montana Judge Brian Morris.¹⁴

The plaintiffs included the family of Lucio DiMauro, admitted in September 2020, who allegedly suffered roughly a dozen documented falls before dying in August 2021; the family of David Patzoldt, admitted in October 2021, whose heart medication was allegedly withheld for nearly three weeks before he died in January 2022 from sepsis and other complications; and the guardian of Lesley Jungers, a current patient the lawsuit said had been left unsupervised multiple times and spent 14 days in locked seclusion over family objections.¹⁴⁷ The suit alleged violations of constitutional rights and sought monetary damages and a court order compelling improved conditions.

Revolving Leadership

Since the 2022 decertification, at least six people have held the hospital’s top job. DPHHS hired the consulting firm Alvarez & Marsal in 2022 to oversee reform under a contract that eventually grew to nearly $7 million.¹⁵ Temporary administrator David Culberson had his contract ended early in January 2024. Interim CEO Jennifer Savage was removed in July 2024.¹² Dr. Kevin Flanigan was hired as CEO effective August 2024 and resigned for undisclosed reasons in July 2025, with his last day on August 8.¹⁶ Dr. Daniel Bemporad, a forensic psychiatrist who had worked at the hospital from 2021 to 2024, was named interim CEO.¹⁷ Staff have described the leadership culture as “disrespectful and unprofessional” and cited fear of reprisal.

The Forensic Waitlist

Because the 54-bed forensic unit is the only facility in Montana authorized to involuntarily medicate defendants found unfit to stand trial, the backlog has real courtroom consequences. As of June 2023, 70 people were on the waitlist. By June 2026, that number had grown to 87.¹⁸ Defendants often wait months in county jails that cannot provide psychiatric care, and some have waited as long as 19 months for an evaluation.¹⁹ Once admitted, patients typically stay only about two weeks of the 90 days allotted, and many deteriorate after returning to jail without adequate medication support.²⁰ Courts dismissed criminal charges in at least 24 cases between 2024 and 2025 because the delay in admission violated defendants’ due process rights.

Senate Bill 429, enacted in 2025 as Chapter 607, revises criminal commitment procedures by allowing involuntary medication of defendants in county jails under certain conditions and barring contempt charges against the state when no hospital bed is available.²¹²²

What the State Is Doing Now

In 2023, the legislature created the Behavioral Health System for Future Generations Commission and set aside $300 million for system-wide reform, with up to $75 million earmarked for capital infrastructure.²³ A 2023 law required patients with primary diagnoses of dementia or traumatic brain injury to be transferred from the state hospital to community facilities by June 2026, and another required the state to share unredacted abuse and neglect reports with Disability Rights Montana.²⁴ In 2025, lawmakers approved approximately $124 million in state funds and up to $40 million in federal funds for behavioral health reform, funding a new forensic facility, additional beds at existing state facilities, expanded community crisis beds, and county reimbursement for holding criminal defendants awaiting state mental health services.²⁵

At the Warm Springs campus, a $21.3 million construction project targeting all four hospital units and the medical clinic began interior work in December 2024, with completion targeted for December 2025. That work is on top of $16 million appropriated in 2023 for earlier renovation phases.²⁶ The Gianforte administration has committed to upgrading the existing Warm Springs site rather than relocating the hospital, even as officials acknowledge the remote location makes recruitment and retention difficult.²³

To house patients displaced by construction, 18 patients were moved in November 2024 to a satellite called MSH Grasslands, in a building leased from Shodair Children’s Hospital in Helena. The state is exploring using the Shodair campus as a permanent 16-bed step-down facility for patients who no longer need intensive care.²⁶

For the forensic backlog, the state is building a new 32-bed forensic psychiatric facility near Laurel. The Montana Board of Investments purchased a 114-acre parcel on June 12, 2026, for $2.6 million. The total cost for the initial 32 beds is estimated at up to $59.3 million, roughly $22 million more than first expected, with design allowing expansion to 64 beds. The project has drawn opposition from Laurel residents and the city council, and still needs a zoning change.²⁷¹⁸

Where Recertification Stands

DPHHS submitted its CMS recertification application on December 23, 2025, and as of March 2026 had received no formal acknowledgment from the federal agency. The department reported that 81% of required Conditions of Participation had been met and was preparing for a CMS survey expected in late spring or summer 2026. State officials said they expect the survey to produce additional findings requiring corrective action.²⁸

The hospital still lacks an electronic health records system. As of January 2026, no formal request for proposals had been posted, despite $27.6 million appropriated for the system in 2023. A legislative audit of staffing volatility at the hospital was underway and expected by August 2026.²⁹

Finances remain tight. The Healthcare Facilities Division projected a $14.2 million shortfall for state fiscal year 2026, driven largely by costs at the state hospital, which was itself projected to be $14 million over budget on continued contract staffing, even after the state negotiated two rounds of rate reductions with staffing agencies that saved an estimated $5.8 million.³⁰ DPHHS reported a broader $34.4 million agency shortfall to the interim budget committee in March 2026.²⁵

1
Daily Montanan. Montana State Hospital to Lose Federal Funding on Tuesday
2
Montana DPHHS. Montana State Hospital Mission Statement
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Montana DPHHS. Montana State Hospital
4
Flathead Beacon. Montana State Officials Seek More Control Over Judicial Involuntary Commitments
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Montana Free Press. Montana State Psychiatric Hospital to Lose Federal Funding
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NPR. The Only Psychiatric Hospital in Montana Is Losing Federal Funding
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NBC Montana. Montana Psychiatric Hospital Is Poorly Run and Neglect Has Hastened Patient Deaths, Lawsuit Says
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KFF Health News. Montana State Psychiatric Hospital Confidential Reports
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Disability Rights Montana. The Yellow Bags: Discharges Into Homelessness From Montana State Hospital
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Daily Montanan. State Hospital Employees Describe Distressing Work Environment at Friday Meeting
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Daily Montanan. Montana State Hospital Patient Recalls Time in Warm Springs
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Montana Free Press. Montana Public Psychiatric Hospital Shuffles Top Leadership Again
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NBC Montana. Montana State Hospital Staffers Raise New Concerns Over Conditions
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Montana Free Press. Patient Families Sue State, Allege Negligence at Montana State Hospital
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Montana Free Press. Montana Health Department Boosts Contract for State Hospital
16
Montana Free Press. Montana State Hospital CEO Resigns for Undisclosed Reasons
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Daily Montanan. State Announces New Leadership at Montana State Hospital
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Daily Montanan. State Officials Settle on Laurel for Forensic Psychiatric Facility
19
KFF Health News. Long Waits for Montana State Hospital Leave Psychiatric Patients in Jail
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NPR. Montana Inmates With Mental Illness Languish in Jail Awaiting Treatment Before Trial
21
Montana State Legislature. LJIC Bill Summary
22
KFF Health News. Montana Millions Legislation Revamp Behavioral Health System
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Montana Free Press. Montana Eyes $30M Revamp of Mental Health, Developmental Disability Facilities
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KFF Health News. Troubled Montana State Hospital, Slow Overhaul, Legislative Limbo
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Daily Montanan. Montana Lawmakers Approve $124M to Revamp Behavioral Health System
26
Montana State Legislature. DPHHS Department Updates
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Billings Gazette. Montana Purchases Land Near Laurel for Forensic Mental Health Facility
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Montana State Legislature. DPHHS Update Slides, March 2026
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Bozeman Daily Chronicle. After Years of False Starts and Fixes, Can Montana State Hospital Meet Federal Standards
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Montana State Legislature. DPHHS Department Updates, December 2025