Consumer Direct Care Network, a Missoula-based home health care company, has laid off five people as part of a reorganization and has given notice to another 35 people that they’ll likely be laid off within about 30 days.
“This is a tough day,” said President and CEO Ben Bledsoe on Friday. “We did set two different reductions in motion this week. One is simply restructuring and preparing for the next stage of growth. The other is related to closing our Medicare lines of services, home health and hospice. The service closure is in reaction to many years of financial challenges and now facing Medicare rate reductions in 2020.”
Of the 35 people given notices, many were nurses or therapists but some are also case managers or other administrative positions.
Bledsoe said the company is going to try hard to “set those employees up for success” and everyone laid off will be given severance pay packages.
Bledsoe noted that the home health and hospice lines of service had been losing money for the company for a decade.
“We had been keeping it open because we believed in the service and in the team but it has escalated to a point where it’s no longer feasible,” he said.
He estimated that the 2020 Medicare rate restructure will result in a 15% to 20% reduction in the rates they could charge for those services.
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“I read an article (in Crain’s Chicago Business) that said experts are estimating 20% of home health care agencies across the nation will have to close their doors because of it,” he said.
He also said that over the last decade, there’s been much more of a competitive environment for referrals in Missoula.
“We couldn’t get enough referrals,” he said.
Consumer Direct Care Network was chosen earlier this fall to administer $500 million worth of spending by the state of Washington to oversee providers of in-home personal care and respite. That contract will allow the company to hire positions in Missoula, Bledsoe said, but those will be mostly administrative positions.
The people affected by Friday's layoff news work in Missoula and Ravalli counties, he said.
“On the one side, we’re right-sizing,” he said. “We had been taking on growth so now that we’re to a more stable point we had to lay off a few people and reorganize a few things here and there. All of our other service lines, we’re still a growing company. We’ll add more administrative jobs. But it’s painful that we had to close the clinical lines of services.”
The company employs about 320 people in its headquarters off of North Reserve Street, along with about 75 caregivers around Missoula. Nationwide, the company has about 600 administrative employees and supports the employment of about 28,000 caregivers.