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Integral Care, Austin's largest mental health care provider, approves 48 layoffs in next budget

The facade of a building with a sign out front that says Integral Care
Gabriel C. Pérez
Integral Care offers mental health, intellectual and developmental disability services.

Integral Care, the mental health authority for Austin-Travis County, voted Thursday to approve a budget that eliminates nearly 10% of its positions. Along with the 48 individuals who were identified for layoffs, 67 vacant positions were also cut.

Employees in the union United Workers of Integral Care said layoffs would further strain staff already struggling to meet the needs of its large client base. As of 2022, Integral Care reported serving 27,550 people, making it the largest local provider of mental health services.

Megan Moriarty, who does intake and counseling at Integral’s Care's Second Street clinic, said some patients without health insurance already don’t get the services they need due to a lack of organizational resources.

“We don't have the staff to do it — before any cuts, before layoffs, before programs disappearing, we already don't have enough people,” Moriarty said Thursday at Integral Care's budget meeting.

The agency's $131.5 million budget for the 2024 fiscal year is more than $22 million less than last year's budget. Officials have largely attributed this dip to unexpected changes in the funding Integral Care receives from federal and state sources.

As the local mental health authority, Integral Care gets funding from the county and the City of Austin, as well as Travis County’s public hospital district, Central Health. However, state funding sources make up the largest share of its budget.

Previously, state funding primarily came by way of a federal 1115 Medicaid Waiver. In states that have chosen not to expand Medicaid under the Affordable Care Act, these waivers finance programs that provide care to uninsured and low-income patients. Texas’ 1115 Medicaid Waiver was temporarily in jeopardy, however, when the Biden administration challenged its renewal in 2021. Although the challenge was ultimately dropped, Texas still made adjustments to how it supports entities like Integral Care, funneling money through the state’s Charity Care Program and Direct Payment Program (DPP).

According to the agency’s Chief Operations Officer Dawn Handley, these programs allow less flexibility in how funds are used. Whereas the Medicaid 1115 functioned like a grant that supported entire programs, the state's new model ties funding to the number of units of service the organization delivers. During FY 2022, Integral Care did not deliver as many services as the state expected and must return $1.6 million to the state as a result, Handley said.

Another consequence is that Integral Care will officially end several of its programs, including its 15th Street respite center and mood disorder clinic. Officials said services offered through those programs would be folded into other Integral Care offerings.

Additionally, organization leaders said, $4 million in expected funding from the Legislature did not materialize this session. Instead, lawmakers approved only $400,000 in annual payments over the next two years.

While Integral Care leadership searched for grants and other sources to make up for the unexpected losses, Handley said, they were not successful in time for this year's budget process.

"[We] worked diligently to reduce the shortfall as much as possible," she said at a budget forum earlier in August. "In addition to looking at new and existing funding streams, we also looked at ways to reduce administrative costs and more. We'll continue these efforts into the next year as well."

A number of Integral Care employees and clients expressed concern over the layoffs at Thursday's meeting, so the board of trustees voted to approve the layoffs and reduced budget with a caveat — that affected employees get 12 weeks of notice before their positions are eliminated instead of six. Integral Care will also keep those employees informed of positions that become available due to potential new revenue sources.

In a statement, the union's leadership said the change was an improvement, although “not an all out win.” Over the next three months, UWIC said, it will turn its attention to local funders who could offer support.

“The union is now calling on the City of Austin and Travis County elected leaders to use this 12 week period to urgently work with [the Integral Care board] to secure additional funding to prevent any employee layoffs and cuts to services,” union leaders said in a statement.

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Olivia Aldridge is KUT's health care reporter. Got a tip? Email her at Follow her on X @ojaldridge.
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