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Western Montana Mental Health CEO Explains Layoffs Due To Medicaid Cuts

Western Montana Mental Health Center headquarters in Missoula
Eric Whitney
Western Montana Mental Health Center headquarters in Missoula

Last week Montana Public Radio reported about coming layoffs at the state’s largest community mental healthcare provider.

Employees at Missoula-based Western Montana Mental Health told us about 50 case managers there were being laid off due to state government cutting Medicaid payments.

The organization confirmed the cuts Monday, and today we’re hearing from its CEO, Jodi Daly.

Western Montana Mental Health provides mental health care to more than 15,000 Montanans in 15 counties; from Livingston to Libby and Kalispell to Dillon. Nearly all of it’s roughly $40 million a year in revenue comes from Medicaid paying for client services.

Medicaid is funded by state and federal dollars, and state lawmakers this year mandated cuts to the state agency that administers Medicaid in Montana, the Department of Health and Human Services.

Western Montana Mental Health Center CEO Jodi Daly spoke with MTPR’s Corin Cates-Carney.

Corin Cates-Carney: How many case managers and community based aides are a part of these layoffs?

Jodi Daly: Between Friday and Monday we did 44 layoffs.

CCC: And are more expected?

Jodi Daly, chief executive officer, Western Montana Mental Health Center.
Credit Courtesy WMMHC.
Jodi Daly, chief executive officer, Western Montana Mental Health Center.

JD: Not at this point, but my fear is we’re waiting for the governor’s proposed cuts.

CCC: Is it possible for your organization to absorb the reduced Medicaid payments without cutting client services?

JD: No. We’ve been on a starvation diet as it relates to the Medicaid reimbursement rates for years.

Little by little every year we knew that at some point we’d be painted into a corner as it relates to Medicaid reimbursement, and that day has come. It’s hard on us, our staff, our organization is grieving because of the losses, and the changes we need to make to our organizational structure. But it’s also going to be a community issue because as you know every single one of us have a loved one or friend who suffers from a behavioral health issue.

CCC: What was or wasn’t on the table for you to reduce spending within your organization because of these cuts?

JD: Frankly everything was on the table and continues to be on the table as it relates to figuring out how we're going to mitigate these damages organizationally. At this point what we knew and what we evaluated is that those people that we have currently in case management positions, we weren't able to cover their salaries and benefits.

CCC: As far as MTPR can tell, other community mental health organizations are not having to lay off or have not laid off workers in response to these changes to Medicaid rates. What makes Western Montana Mental Health Center different in this?

JD: Well, I think that - I don't know that we are different. I do think and have spoke to many CEOs that are really grappling, and I think being careful with the amount of media attention that we have received regarding our layoffs, and so what I can tell is I have spoken with people who are thinking through whether they do significant salary cuts to those people in those positions. So you will see either salary cuts or layoffs. Possibly we're a little bit different, and one of the different things that we do or have done at Western, right wrong or indifferent, is that we have built beautiful campuses. So our overhead is probably more expensive, and maybe [more of] a restriction for us than some people who may not even have offices, or who rent offices.

The other thing that we do, that I'm sure is different than other agencies are what we call 'client-related expenses,' and that is what Western comes up with to contribute to help people to buy pots and pans if they're in a new home, to find clothing and buy clothing if they're homeless, sleeping bags, shoes, sometimes helping people pay for utilities, and that generally comes, frankly, from our revenues, but it's something that we always felt certainly has benefited clients and moved them towards recovery, and my best guess is not many agencies put that kind of dollar amount that they don't have to towards clients.

CCC: Critics of these cuts have suggested that high administrative overhead might be the reason your organization can't afford to keep some of the front line staff it needs. Wondering what your thoughts are on that?

JD: Every senior staff here is paid under market. Within these cuts, Corin, we did - senior staff immediately took a three percent cut, and there is a five percent proposal as well if needed. So they, day one, before anyone was laid off, took a three percent cut.

CCC: A group of your employees unionized this fall. They said this was to create some protection for them in case there were layoffs that were announced. Did you or your fellow management staff discourage that union effort? And what do you think that unionization meant from your organization?

JD: Well, no, I don't think we discouraged it. I mean, we really can't. My personal view is that they have the right to organize. I absolutely get their anxiety. Anytime anyone's fearful for their job they're really looking to see if someone can help them to keep their job. And I absolutely understand people wanting to have severance pay, or severance packages, as they've been speaking out in the media. I'm here to tell you that if we could do that we probably would, because we value not only those we serve, but those who serve alongside of us. But we are a non-for profit.

CCC: Do you think your payments from Medicaid will ever be restored to previous levels? And if that does happen, would you be able to staff up to previous levels?

JD: I don't know. As I had alluded to earlier, we've been on a starvation diet for a few years, so we're still not covering the costs of all the programs we run, so they would have to significantly increase the Medicaid reimbursement rate to become aligned with what the costs of services are. I really think that payment methodology needs to change. Fee for service is kind of an archaic way of participating in mental health, we're a little behind the 8 ball given the state's determination to make these cuts. They're going to push the costs down to county commissioners and city councilmen and often people don't really see the work that we do on the ground.

CCC: How would you describe the [Montana] Department of Health and Human Services' communication with your organization about the details and timelines of these cuts to Medicaid provider rates?

JD: One of my concerns has been a lack of planful communication from the Department of Public Health and Human Services. One of my vocal complaints has been a lack of partnership as it relates to how do we together assist each other and support each other in the resources to ensure that the most vulnerable population is served.

We frankly haven't heard yet from the department as it relates to the Governor's proposed cuts post special session. That concerns me because, am I looking at a second wave of cuts? We're not sure when the second shoe is going to drop, frankly.

CCC: With that in mind, what's your understanding of how these cuts are actually going to impact the services of Western Montana clients? It seems that some is known, some is still not known at this point?

JD: In the larger urban areas, Butte, Missoula, Kalispell, Bozeman we may not see as much change. We should be able absorb all of our current open clients, just with a new model. At the end of the day, if we have to move clients somewhere else, we will do that first. No one will be essentially dropped or forgotten, that I can promise.

The areas that I'm more concerned about are going to be the rural or frontier areas, like Dillon and Libby, and with these cuts it's going to be really hard for us to not only cover the cost of staff, but it also contributes to us to not be able to contribute to the overall operation. In the rural areas like Dillon and Libby there's probably, I'm kind of guessing, Corin, there's probably 40 to 50 clients that we'll be transferring to federally qualified healthcare centers.

Corin Cates-Carney is the news director at Montana Public Radio. He joined MTPR in 2015 and is a graduate of the University of Montana School of Journalism.
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