South America's poorest country was investigated and given warnings by the Inter-American Commission on Human Rights in 2003 and 2008 for its treatment of mental patients following deaths, rapes and other abuses at the Neuro-Psychiatric Hospital in Asuncion.
The warning was lifted late last year after the hospital guaranteed the security and well-being of patients, said Mirta Mendoza, head of Mental Health, a state-run office.
"A private security company keeps strict control over the hospital. Patients, however, are allowed to stroll in the gardens, and with a doctor's approval, they can even have consensual sex, because they're human beings who need affection," said Gustavo Lopez, head of the hospital's nursing unit.
But there's no money for heating to protect patients from the biting Paraguayan chill during the winter months.
Some spend their days in rooms with scraped walls wrapped in blankets or sleep on mattresses on top of rusty metal beds. Others watch time slip by in the long halls. They crouch on the yard's concrete floor to eat mangoes, smoke cigarettes and drink Terere, a traditional cold drink made of Yerba mate tea.
The hospital recently hit a crisis when it couldn't even buy food and there were no psychiatric drugs for ambulatory patients, only inpatients, hospital director Teofilo Villalba told The Associated Press.
Villalba said its patients come from Paraguay's lower and middle classes.
"They can't be kept without nutritious food because they would go into a crisis," he said. "No one can recover while hungry. When the rich get sick here, they're treated at private hospitals or are sent abroad."
Despite the questionable conditions, for many patients it remains the only option. Doctors say 75 per cent of the hospital's 286 patients have been abandoned by their families. In the landlocked country of 6.2 million people, many feel lucky to receive any kind of medical treatment, even if the system is broken.
"I'm fine in the hospital. I don't want to go home," said Arnaldo, a 21-year-old patient who suffers from chronic psychosis and has been abandoned by his family.
Paraguay's fragile economy has battered the public health sector.
"The budget for all public hospitals is $900 million, but we can only use 30 per cent of it because the Finance Ministry has not transferred the rest," Paraguayan Health Minister Felix Ayala said.
Villalba said officials have temporarily prevented a deeper crisis.
"Luckily the Finance Ministry has supplied us at least for the next two weeks. After that, we'll see how we do ..."