Mental Health Center Lays Off Employees, Shuts Down Two Programs to Continue Operations

Jun 5, 2014

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Mental health services are taking a hit in western Kentucky, with the Pennyroyal Center announcing the closure of its Madisonville and Hopkinsville therapeutic rehabilitation programs. The center will also lay off 15 people. 

The therapeutic rehabilitation programs are for adults with chronic mental illness and will cease operation June 27.

Pennyroyal Center Executive Director David Ptaszek says the layoffs and closure were “the most painful decision” he’s made at the center. He cites a $1.2 million funding cut from the Department for Behavioral Health, decreased income from Medicaid managed care and steep obligations to the Commonwealth’s retirement system as reasons for changes. 

The cut consists of a $916,000 Community Care funding from the Department of Behavioral Health that made it possible for the Pennyroyal Center to charge reduced fees. Although the help for low income clients is no longer supported by those funds, the center says it won’t refuse patients who can’t pay.

On top of that new loss of funding, Pennyroyal Center has lost $400,000 to $500,000 in each the past three years with the advent of Medicaid managed care. But the center does hope it will receive financial help for the required premium increase in the Kentucky Employee Retirement System, which will be nearly 40 percent of its employees’ salaries starting July 1.

Mental health centers across the state are facing the same dilemma—increased costs and decreased funding—with Louisville’s Seven Counties center filing for bankruptcy.

Ptaszek hopes the adjustments will allow the Pennyroyal Center to continue operations and stay financially stable throughout the next fiscal year. The center serves eight counties in western Kentucky: Caldwell, Crittenden, Christian, Hopkins, Lyon, Muhlenberg, Todd and Trigg.