Oregon Clinic Billed Medicaid $14M as It Bused Patients to Portland

A St. Helens, Oregon addiction treatment nonprofit billed the state's Medicaid program $6.3 million in 2024 and $7.89 million in 2025 while nearly doubling what it paid its two cofounders, according to tax filings reviewed by KGW. Portland city officials say Medicine Wheel Recovery Services is still discharging Native American patients onto city streets, despite a cease-and-desist letter and the organization's assurances that the practice had stopped.

The October 28 investigation by reporter Evan Watson is a follow-up to KGW's August reporting, which found that Medicine Wheel paid to fly Native Americans in from reservations for treatment but did not pay to help them get home afterward. The organization told Portland staffers it discharged one to five people a month between 2018 and 2025 — as many as 420 one-way bus tickets over seven years.

The revenue shift behind the growth

Medicine Wheel's finances changed character in two years. In 2022 the organization brought in $3.05 million, 90% of it from contributions and grants. By 2024 and 2025, program service revenue — overwhelmingly Medicaid — accounted for 83% and 86% of its funding.

Oregon Health Authority payment data corroborates the tax returns from a different angle: more than $13 million in direct fee-for-service Medicaid payments from January 1, 2024 through the end of 2025, measured by calendar year rather than tax cycle. The $13 million and the roughly $14 million in billings differ because they count different periods, not because either figure is in dispute.

In filings to the state, the organization described its expansion in its own terms: from six transitional houses to 14, and mentors who "travel to bring participants here from tribal reservations who are wishing to access treatment." The same filings, as KGW reviewed them, do not mention spending taxpayer money to return anyone home.

Pay raises the tax returns do not explain

Cofounders Tana Howtopat and Pamela Councell each earned more than $260,000 in 2025, up from $143,075 and $146,800 respectively in 2022 — an increase of roughly 80% in three years. The filings show no indication that an independent review, comparative compensation data, or documented board approval supported the raises.

Governance changed alongside the pay. In 2022, Medicine Wheel's seven directors and officers other than the two cofounders were unpaid. By 2025 those individuals had been replaced, and six of the seven new directors and officers were compensated, from $13,000 to more than $81,000. The organization also reported that it did not obtain independent financial statement audits for 2022, 2024 or 2025.

"This is really a governance black hole," Laurie Styron, chief executive of the nonprofit watchdog CharityWatch, told KGW after reviewing the filings. "There's no independent, audited financial statements. There's really just a complete, almost a total lack of governance here to ensure that charitable dollars are being used properly."

State Rep. Tawna Sanchez, the first Native American to represent Portland in the Oregon legislature, put the compensation question more bluntly: "Doesn't feel like a nonprofit anymore, does it?"

What patients describe

The human account in the investigation has not changed since August. Jerilyn Grassrope, a grandmother from South Dakota, told KGW she was dropped at a Sauvie Island bus stop by Medicine Wheel staff before becoming homeless. "He gave me a bus pass ... he said we can't help you anymore," she said. "Just being put out there where I didn't know nobody, it's like I wasn't given a chance."

Portland Mayor Keith Wilson described the pattern as intentional dumping. "That is absolutely heart-wrenching," he told KGW, adding that the city had been "used as a dumping ground."

KGW's reporting also cites a 2025 analysis finding a 118% increase in homelessness among Native Americans in the Portland area over two years — the largest increase of any racial group in that analysis.

The oversight question Oregon has not answered

The Oregon Health Authority is investigating Medicine Wheel, and the city is pressing for records on discharge practices. The organization did not respond to KGW's requests for comment, including a visit to its St. Helens office, calls to staff and its attorney, and a written list of questions sent to both cofounders.

Nothing in the public record reviewed by KGW shows what enforcement step, if any, the state has taken against a provider that is also one of the larger Medicaid-funded addiction treatment operations in the region. The records describe an asymmetry that shows up wherever public insurance pays for treatment: the state reimburses the treatment episode, and the return trip is not part of it.

Oregon has been wrestling with the limits of its own oversight machinery all fall. The state opened a rulemaking petition on residential treatment safety standards this month, and a separate Oregon recovery program is already under scrutiny for operating without a license.

The pattern KGW documented is the one reported in Arizona's sober living fraud prosecutions and in patient brokering investigations around the country: an organization recruits patients from far away, bills public insurance for the treatment episode, and treats the return trip as someone else's problem. What makes the Oregon case distinct is that the recruiting was openly described in the organization's own filings to the state agency that funds it.

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