LARIMER COUNTY, Colo. — A mental health agency in northern Colorado laid off more than 10% of its staff with one day’s notice. SummitStone Health Partners CEO Michael Allen said his company is the latest mental health agency to resort to layoffs following changes to Medicaid service rates that took effect July 1.
SummitStone Health Partners , which services patients on Medicaid in Larimer County, laid off 75 employees on Aug. 1. Some were informed individually, while others were notified in groups.
"No severance, with no warning, very out of line with the company that we thought we worked for,” said Anne Avonlee, a former clinical program manager with SummitStone Health. The explanation given for the layoffs was budget constraints. Allen explained that Medicaid completely changed its reimbursement structure from a per-member, per-month payment system to a prospective payment system, paid by the encounter or client service.
"That's very different than we've ever been paid in the past. So, as we got our rates at the end of June, right before the beginning of the fiscal year, we did financial analysis and realized that we needed to cut several million dollars," Allen said. Allen stated that budget cuts were made elsewhere before turning to layoffs, but ultimately, they weren't breaking even.
"The reason we did this is so we can continue to be in our community and sustainable," Allen said. "We were very thoughtful about how we did the reduction in force. We may not have got.