RENTON, Wash. — About 100 non-union employees at Valley Medical Center in Renton were given notice earlier this week that they were being laid off.
This comes on the heels of significant financial shifts at both the federal and state levels for funding for hospitals and Medicaid.
Valley Medical Center relies heavily on the Medicaid Directed Payment Program (DPP). This program provides financial stability for safety net hospitals. It is a federal matching program that helps bring reimbursement closer to the actual cost of care.
“We learned in February that enhanced federal Medicaid reimbursement we depend on ended abruptly on December 31, 2024, with no notice or time to plan. It has not been renewed for calendar 2025 and equals an estimated $80-$100M per year to Valley,” VMC chief communications & philanthropy office Elizabeth Nolan told KIRO 7 in an email.
If the program had been renewed, the net benefit to Valley would be approximately $6.5 million monthly, the hospital said.
As a public district hospital, Valley Medical Center said it cares for a disproportionate share of Medicaid patients. Without DPP, for every $1.00 of Medicaid we receive, it costs $1.85 for the care provided.
Washington is one of 14 states with similar Medicaid programs that also have not been renewed.
According to the VMC, some affected departments include: Administration, Construction Management, Culinary & Nutrition Services, Enterprise Project Management, Finance, Human Resources, Management Team, Marketing & Outreach, Information Technology, and Process Improvement, among other administrative and support functions.
“We do not expect patient care will be impacted at this time. Prior to reducing positions, Valley had paused on non-mission critical projects, positions, and programs.”
Some new construction and renovation projects have been put on pause as a result.
When asked if the hospital can expect more layoffs in the future, Nolan said: “We don’t know. We truly hope the unapproved Medicaid DPP funding for calendar year 2025 will receive approval soon.”
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