WOONSOCKET – Maria Montanaro sees a light at the end of a very dark tunnel at Thundermist Health Center’s offices in that she hopes stakeholders can give the nonprofit health provider the shot of adrenaline it needs to remain open.
Montanaro on Tuesday confirmed to Providence Business News
on earlier reporting that Thundermist needs an $8 million bailout by the end of October to mitigate major financial problems the organization incurred. That cash infusion she says will help ensure Thundermist’s staff that the organization has the working capital to get through the year.
Montanaro clarified to PBN that Thundermist is seeking $8 million in working capital to cover cashflow deficits during the early stages of the 2025 fiscal year that began Sept. 1. The $8 million, Montanaro said, would be a loan from stakeholders within the health care community, including Lifespan Corp., Landmark Medical Center in Woonsocket, Care New England Health System, Tufts Health Plan, Delta Dental of Rhode Island and South County Health in South Kingstown.
No taxpayer dollars are being sought to save Thundermist, Montanaro said.
With some assistance already received and pledges for more money pending, Thundermist, Montanaro said, is now seeking approximately $6 million from the health partners. Thundermist is also talking to Brown University and Blue Cross & Blue Shield of Rhode Island for this help as well, she said.
“If we get that, we have demonstrated in the 2025 fiscal year budget that shows we will end the year in a stable position and we’ll strengthen for years going forward,” Montanaro said. “There is no good reason why Thundermist should shut its doors.”
However, even with the optimism, Montanaro made clear that if the money does not arrive, not only will payroll not be met, but also Thundermist going into receivership – which will result in it closing down – is at play. Such closure would result in approximately 62,000 state residents needing to find health care elsewhere in Rhode Island on top of the organization already
having laid off 14% of its workforce last month.
She said Thundermist anticipates receiving a one-time employee retention tax credit from the IRS worth $9.8 million. That credit, which was applied for last November, will be used to pay back loans Thundermist receives for this emergency need throughout the current fiscal year, Montanaro said.
The interim CEO also said assistance from Rhode Island’s congressional delegation, including Sens. Sheldon Whitehouse and Jack Reed, D-R.I., “helped us greatly” in connecting with the IRS deputy commissioner in hopefully obtaining the tax credit. She hopes Thundermist receives those funds by the end of December.
“We’re not asking anyone to provide us with funds that they can’t recoup,” Montanaro said.
So, what happened with Thundermist’s finances?
For starters, the percentage of grant funding and donations Thundermist receives from various local and federal entities that is part of the organization’s large budget has dropped significantly. Montanaro said when she first served as Thundermist’s top executive from 1997 to 2011, almost 35% of Thundermist’s annual operating budget came from grants.
Now, grants make up just 13% of Thundermist’s revenue, Montanaro said. That grant funding, federal funding especially, “has not kept pace” with Thundermist’s expansion of services, Montanaro said, putting burdens on the generated revenue side of the organization’s budget.
Plus, Medicaid makes up for 75% of Thundermist’s revenue, which Montanaro says the state’s Medicaid rate needs to be modified.
“This is true for all community health centers; they have been asked to do more, more and more,” she said. “And they’ve stepped up and done it. But you can see how quickly things can get out of whack.”
Also, health care costs “skyrocketed” during the COVID-19 pandemic. Montanaro said health care costs at Thundermist rose by almost 30%. That gap what Medicaid is covering and the cost of a Medicaid encounter “just kept getting larger,” Montanaro said.
The financial situation was so dire that Thundermist on Sept. 1 only had enough cash on hand to operate for six days, Montanaro said, and couldn’t make payroll last month without assistance. Neighborhood Health Plan of Rhode Island did provide Thundermist with $1 million to help with that, she said.
Montanaro also was critical of former CEO and President Jeanne LaChance, who was terminated by Thundermist last month. Montanaro claimed LaChance did not run the fiscal analysis needed to build a budget for 2025, a turnaround plan that needed to be in place and “a myriad of things that have to go well here” this year.
Along with hoping for the needed “cash infusion,” she said Thundermist is seeing “good results” early on this fiscal year with its turnaround plan. But it will take time for that plan to be “fully operative” at Thundermist, she said.
“Our ask of the stakeholders is to stay with us, keep our doors open, give us enough working capital to affect all the turnaround plans built into the 2025 fiscal budget,” Montanaro said.
In addition to paying everyone back, Montanaro said she projects Thundermist will have a $2 million positive cash balance by the end of the 2025 fiscal year, with the predication Thundermist’s budget is built on the “sufficient rates” for services the organization deliver in the Medicaid program. Thundermist back in July requested the R.I. Executive Office of Health and Human Services a Medicaid rate adjustment, which is both still pending and it could return an additional $6 million of funds on the organization’s current service delivery level.
“Every time we deliver medical or behavioral services, we’re losing $65 to $70 on each visit over the cost of care. Our rate request requires no legislative action,” she said. “It will leave us in a stable position to move forward.”
James Bessette is the PBN special projects editor, and also covers the nonprofit and education sectors. You may reach him at Bessette@PBN.com. You may also follow him on X at @James_Bessette.
