Lawsuit Alleging Medicaid Fraud at Rhode Island Hospital Allowed to Proceed

Federal judge rules whistleblower complaint against Gainwell Technologies can move forward

Apr. 2, 2026 at 8:55pm

Got story updates? Submit your updates here. ›

A ghostly, translucent X-ray image of a hospital bed, revealing its internal structures in a symbolic representation of the hidden abuses and neglect within the Eleanor Slater Hospital.An X-ray view exposes the hidden realities behind the alleged Medicaid fraud and patient mistreatment at the Eleanor Slater Hospital.Cranston Today

A federal judge has allowed a whistleblower lawsuit alleging nearly $500 million in Medicaid fraud at the Eleanor Slater Hospital in Rhode Island to proceed. The lawsuit accuses the hospital's fiscal agent, Gainwell Technologies, of submitting fraudulent Medicaid claims and being complicit in the alleged mistreatment and warehousing of mentally ill patients.

Why it matters

This case highlights ongoing concerns about Medicaid fraud and patient abuse at state-run healthcare facilities. The ruling opens the door for further investigation into the role of third-party contractors like Gainwell in enabling or ignoring fraudulent billing practices. It also raises questions about oversight and accountability for the treatment of vulnerable patients in state-run institutions.

The details

The lawsuit was initially filed in June 2022 by three former top officials at the Eleanor Slater Hospital - the chief medical officer, assistant chief medical officer, and former chief financial officer. They allege that Gainwell, the state's Medicaid fiscal agent, approved nearly $500 million in fraudulent Medicaid claims from the hospital between 2016 and 2021. The claims included billing for nursing home-level services at a hospital not licensed as a nursing home, as well as manipulating patient counts to minimize the number of mentally ill patients. Beyond the financial fraud, the whistleblowers also claim patients suffered from abuse, neglect, and being 'warehoused' for years or even decades with little to no treatment.

  • The lawsuit was initially filed under seal in June 2022.
  • In December 2022, the judge allowed the plaintiffs to file a second amended complaint.
  • In early 2023, the U.S. Attorney for Massachusetts weighed in, advising the judge that a fiscal agent like Gainwell could be liable for knowingly causing the submission of false Medicaid claims.

The players

Gainwell Technologies

The state of Rhode Island's fiscal agent for Medicaid, responsible for processing and approving Medicaid claims. Gainwell is accused of approving nearly $500 million in fraudulent claims from the Eleanor Slater Hospital.

Eleanor Slater Hospital

A state-run hospital in Rhode Island that allegedly defrauded Medicaid out of hundreds of millions of dollars and mistreated mentally ill patients by warehousing them for years with little to no treatment.

Brian Daley

The former chief medical officer at the Eleanor Slater Hospital and one of the whistleblowers who filed the lawsuit.

Andrew Stone

The former assistant chief medical officer at the Eleanor Slater Hospital and one of the whistleblowers who filed the lawsuit.

Jennifer White

The former chief financial officer at the Eleanor Slater Hospital and one of the whistleblowers who filed the lawsuit.

Got photos? Submit your photos here. ›

What they’re saying

“There simply is no medical or psychiatric illness that would require anyone to be in a hospital for 60 years, especially a licensed acute-care hospital, which ESH was supposed to be.”

— Brian Daley, Former Chief Medical Officer, Eleanor Slater Hospital

“In this rules-free zone, patients were grievously harmed. Psychiatric and developmentally disabled patients were [often] warehoused in ESH, a physically deteriorating state hospital … for years or decades.”

— Brian Daley, Former Chief Medical Officer, Eleanor Slater Hospital

What’s next

The judge in the case will decide whether to allow the lawsuit to proceed to trial, which could result in Gainwell Technologies being held liable for its role in the alleged Medicaid fraud and patient mistreatment at the Eleanor Slater Hospital.

The takeaway

This case highlights the need for stronger oversight and accountability measures to prevent Medicaid fraud and protect vulnerable patients in state-run healthcare facilities. It also raises questions about the role of third-party contractors in enabling or ignoring fraudulent billing practices.