Home Industries Health Services Providence Community Health Centers to lay off 70 employees

Providence Community Health Centers to lay off 70 employees

By

Katie Castellani

-

05/08/2025

pchc — PROVIDENCE COMMUNITY Health Centers Inc., which serves more than 80,000 patients, announced Thursday it is laying off 70 employees.

PROVIDENCE – Providence Community Health Centers Inc., which serves more than 80,000 patients, announced Thursday it is laying off 70 employees. The nonprofit health organization cited inadequate Medicaid reimbursement rates and a reduction in funding from the 340B pharmacy program as the cause of the layoffs. Affected employees work in a variety of administrative, support

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PROVIDENCE – Providence Community Health Centers Inc., which serves more than 80,000 patients, announced Thursday it is laying off 70 employees. The nonprofit health organization cited inadequate Medicaid reimbursement rates and a reduction in funding from the 340B pharmacy program as the cause of the layoffs. Affected employees work in a variety of administrative, support and clinical roles, the company said. “These layoffs, while incredibly painful, are an absolute necessity for our long-term sustainability,” said Merrill Thomas, CEO and president of Providence Community Health Centers. “I want to be clear: PCHC has a strong balance sheet, which we purposely built up to withstand challenging times like this. These actions are directed by our board, which has a fiduciary responsibility to PCHC and its patients. These are difficult but necessary decisions to ensure we are here for the community for years to come.” Before the layoffs, the health care organization was on track to lose $5 million this year. The financial losses primarily stemmed from lagging Medicaid reimbursement rates, which have not kept up with inflation. In the last five years, Providence Community Health Centers’ costs have gone up 30% while reimbursement rates have only risen by 10%. The organization, which relies on Medicaid for 70% of its funding, says this has created “intense financial pressures.” In hopes of receiving higher Medicaid reimbursement rates, the organization has filled out cost reports and paperwork throughout the past year as directed by the R.I. Executive Office of Health and Human Services. But the rate increases never came. “I have nowhere else to turn but to cut because Medicaid makes up so much of my business,” Thomas said. The 340B pharmacy program also delivered $3 million less than what Providence Community Health Centers had budgeted for because manufacturers have been adding restrictions. The layoffs went into effect Wednesday and affect employees in human resources, IT and billing as well as nurses and health aides, Thomas said. Providence Community Health Centers had about 600 employees before the layoffs. The layoffs come after Anchor Medical Associates announced in April it will be closing, forcing 25,000 patients to find new primary care providers. Thomas noted that the organization is not at risk of closure or missing payroll and providers that were part of programs that were cut have been offered positions. Among the programs cut include its nurse practitioner training program and school based initiatives. “I've been doing this for 40 years, and this is the most unprecedented time I've ever seen at health centers for funding,” Thomas said, adding that he has testified at the Statehouse and with Congressional delegation. “No one is offering any solutions, so we are being forced to now take the necessary means of cutting our expenses to try and bring our budget into line.” The organization checked with its legal team and does not have enough employees at each site to be required to file a WARN notice with the R.I. Department of Labor and Training. Katie Castellani is a PBN staff writer. You may contact her at Castellani@PBN.com.