Safety-net health clinics cut services and staff amid Medicaid unwinding

One of Montana’s largest health clinics serving people in poverty has cut services and laid off workers. The retrenchment reflects similar cuts across the country as safety-net health centers feel the effects of states purging their Medicaid rolls.

Billings-based RiverStone Health is eliminating 42 jobs this spring, cutting nearly 10% of its workforce. The cuts closed an inpatient hospice, will close a center for patients controlling high blood pressure and oust a nurse who worked in rural schools. It also reduced the size of the clinic’s behavioral health care team and the number of employees focused on serving people experiencing homelessness.

RiverStone Health CEO Jon Forte said clinic officials anticipated a deficit as the cost of doing business increased in recent years. But a $3.2 million revenue loss, which he attributed largely to Montana officials removing a large number of patients from Medicaid, pushed RiverStone’s deficit much deeper into the red than anticipated. .

“It just put us in a hole that we couldn’t get out of,” Forte said.

RiverStone is one of almost 1,400 Federally funded clinics in the US that adjust their fees based on what individuals can afford. They are designed to reach people who face disproportionate barriers to care. Some are in rural communities, where providing primary care can lead to financial losses. Others focus on vulnerable populations who are struggling in urban centers. In total, these clinics serve more than 30 million people.

The health centers’ lifeblood is revenue received from Medicaid, federally subsidized health coverage for people with low incomes or disabilities. Because they serve a greater proportion of low-income people, federally funded centers tend to have a larger share of patients in the program and rely on these reimbursements.

Seismic shift

But Medicaid enrollment is undergoing a seismic shift as states reevaluate who is eligible for it, a process known as Medicaid “unwinding.” It follows a two-year freeze on enrollment cancellations that protected people’s access to care during the covid public health emergency.

From May 23rd, more than 22 million people lost coverage, including about 134,000 in Montana — 12% of the state’s population. Some no longer met income eligibility requirements, but the vast majority were laid off due to bureaucratic issues such as people missing deadlines, state documents going to outdated addresses, or system errors.

This means that health centers are increasingly offering free care. Some have seen patient volume drop, which also means less money. When providers like RiverStone cut services, vulnerable patients have fewer care options.

Jon Ebelt, director of communications for the Montana Department of Public Health and Human Services, said the agency is not responsible for the business decisions of individual organizations. He said the state is focused on maintaining safety net systems while protecting Medicaid from misuse.

Nationally, health centers face a similar problem: a perfect financial storm created by a sharp increase in the cost of health care, a reduced workforce and now fewer insured patients. In recent months, clinics in California and Colorado have also announced cuts.

“It’s happening in every corner of the country,” said Amanda Pears Kelly, CEO of Advocates for Community Health, a national advocacy group that represents federally qualified health centers.

Nearly a quarter of community health center patients who rely on Medicaid have been excluded from the program, according to a joint survey George Washington University and the National Association of Community Health Centers. On average, each center lost around US$600,000.

One in 10 centers has reduced staff or services or limited appointments.

“Health centers in general try to make sure patients know they are still there,” said Joe Dunn, senior vice president of public policy and advocacy at the National Association of Community Health Centers.

Most centers operate on tight budgets and some have begun reporting losses as workforces tighten and business costs rise.

Meanwhile, federal assistance — money intended to cover the costs of people who can’t afford health care — has remained largely flat. Congress increased those funds in March to about $7 billion over 15 months, though health center advocates have said that still doesn’t cover the bill.

Until recently, RiverStone in Montana was financially stable. Before the pandemic, the organization made money, according to financial audits.

In the summer of 2019, a $10 million expansion was beginning to bear fruit. RiverStone was seeing more patients through its clinic and pharmacy, an increase in revenue that more than offset increases in operating costs, according to documents.

But in 2021, at the height of the pandemic, these rising expenses – staff salaries, building maintenance, the price of medicines and medical equipment – ​​outpaced the money coming in. Last summer, the company had an operating loss of about $1.7 million. . With Medicaid redetermination underway, RiverStone’s covered patient pool has dwindled, eroding its financial reserve.

Medicaid Reimbursement Rates

Forte said the health center plans to ask state officials to increase its Medicaid reimbursement rates, saying existing rates do not cover continuity of care. This is a complicated request after the state increased its rates slightly last year, after much debate around which services needed the most money.

Some cuts at health centers represent a return to pre-pandemic staffing after temporary federal pandemic funding was exhausted. But others are rolling back long-standing programs as budgets go from stretched to operating in the red.

California’s Petaluma Health Center in March laid off 32 people hired during the pandemic, The Democratic Press reported, or about 5% of its workforce. It is one of the largest primary care providers in Sonoma County, where life expectancy varies based on where people live and poverty is more prevalent in predominantly Hispanic neighborhoods.

Clinica Family Health, which has clinics in Colorado’s Front Range, laid off 46 people, or about 8% of its staff, in October. It consolidated its dental program from three clinics to two, closed an outpatient clinic designed to help people avoid emergency rooms and ended a home visiting program for patients recently discharged from the hospital.

The Clinic said 37% of its patients on Medicaid before the reduction began lost their coverage and are now in the Clinic’s discount program. This means the clinic now receives between $5 and $25 for doctor visits that used to bring in between $220 and $230.

“If it’s a game of musical chairs, we’re the ones with the last chair. And if we have to take it out, people fall to the floor,” said CEO Simon Smith.

Stephanie Brooks, policy director for the Colorado Community Health Network, which represents Colorado’s health centers, said some centers are considering consolidating or closing clinics.

Colorado and Montana are among the higher percentages of enrollment decline. Officials in both states defended their Medicaid redetermination process, saying most people who dropped coverage likely no longer qualify, and pointing to low unemployment rates as a factor.

In many states, both health care providers and patients provided examples in which people cut off from coverage were still eligible and had to spend months embroiled in system problems to regain access.

RiverStone’s Forte said the reduction in services in the wake of a pandemic adds insult to injury, both for health care workers who have remained in difficult jobs and for patients who have lost confidence that they will be able to access care.

“This is so counterproductive and counterintuitive to what we are trying to do to meet the health needs of our community,” Forte said.

KFF Health News correspondent Rae Ellen Bichell in Longmont, Colorado, contributed to this report.