Health providers say restored cuts good, but damage done

HELENA (AP) — Montana health service organizations that eliminated staff and services amid state budget cuts cheered Thursday after Gov. Steve Bullock announced that funding will be partially restored, but they say that long-term damage already has been done.

Bullock said Wednesday that a brighter budget picture meant that $45 million will be given back to state agencies that cut spending to close a shortfall caused by lower-than-expected revenues and the most expensive fire season in state history.

Most, if not all, is likely to go to the hard-hit Department of Public Health and Human Services, which cut more than $49 million and left hundreds of jobs unfilled.

To meet those cuts, health officials reduced the reimbursement rate for Medicaid providers like nursing homes and assisted-living facilities, and ended contracts with four organizations that provided case management services to people with developmental disabilities.

One of those organizations, AWARE Inc. has since signed a state contract to provide those services at a reduced rate.

On the day Bullock announced the partial restoration of health department funding, AWARE said it was cutting up to 30 more jobs on top of the 70 it already eliminated.

AWARE public policy officer Pat Noonan said Thursday that the governor’s announcement was a shot of good news just when the state’s health care industry needed it, but he cautioned the details aren’t yet known and that his organization will proceed with the new job cuts.

He said the state’s budget cuts have forced health providers to think more creatively, but that it will take a long time for the system to recover.

“I do believe that there is some permanent damage that is done,” Noonan said. “Some businesses have closed and won’t be coming back. It will take some years to build up the system as a whole.”

Helena Industries shut its doors in April after serving 900 people with disabilities. Another, Central Montana Medical Center in Lewistown, stopped offering case-management services for the disabled in eight counties.

A third, Opportunity Resources Inc., cut 27 jobs after it stopped providing case management services under its state contract. Its CEO, Josh Kendrick, said it’s difficult to know how the governor’s announcement will affect his organization, but it won’t bring back those jobs.

“It is our hope that we will be able to use the reinstatement to raise our wages as we continue to be in a staffing crisis at our organization but it is a little early to know for sure,” Kendrick said in an email.

It wasn’t clear whether any of the $45 million will go toward restoring funding for case management services, which help the developmentally disabled and mentally ill find services and lead independent lives. The allocation of the $45 million won’t be decided until Sept. 1, after a meeting between health department officials and providers.

Bullock said his administration is working on a plan to restore targeted case management in mental health, and that the department has already figured out a path for case management for the developmentally disabled — a reference to AWARE’s reduced-rate contract.

The cut to the Medicaid reimbursement rate is the only program identified so far as a target for restoration using the new $45 million. Nursing homes and assisted-living facilities that sued the state over the rate cut plan to pursue their lawsuit, despite the news.

Rose Hughes, executive director of lead plaintiff Montana Health Care Association, said raising the Medicaid rate now will not compensate facilities for money lost earlier this year or resolve the problems the facilities had with how the department made the cut in the first place.

“There’s the issue of whether or not the department is properly adopting the rules, following the process and giving us the information we need,” Hughes said. “It’s worth pursuing those to some resolution to make sure it doesn’t happen again.”

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