Community Health Centers of Lane County announces plan to stabilize operations in response to revenue losses

The Community Health Centers of Lane County (CHCLC) today announced steps being taken to address financial challenges facing the organization. CHCLC is experiencing a significant financial gap driven by both declining revenue projections and increasing operating costs. Several factors have contributed to lower-than-expected revenue, including:

• Changes related to the Coordinated Care Organization (CCO) transition
• Changes affecting the 340B pharmacy program (a Federal policy requiring pharmaceutical companies to provide discounts to eligible providers)
• New patient revenue that has not met projections
• Patient encounter volumes and reimbursement levels that have not kept pace with expectations

At the same time, expenses continue to rise, including:

• Increased costs for medical supplies, medications, and vaccines
• Rising health insurance expenses
• Paid Family and Medical Leave (PFML) costs, and annual cost-of-living adjustments

As a result, CHCLC is projecting a deficit of approximately $2 million in Fiscal Year 2026-2027, which can be covered through one-time revenue sources. However, the projected deficit for Fiscal Year 2027-2028 grows to approximately $6.5 million, requiring additional action.

Many of the revenue changes impacting CHCLC are relatively recent. Earlier in Fiscal Year 2025-2026, positive revenue trends provided reason for optimism. As more information became available and financial projections were updated, it became clear that stronger corrective actions would be necessary.

The financial pressures facing CHCLC are not unique. Across Lane County and Oregon, healthcare organizations are experiencing significant instability. Primary care organizations in particular are operating with extremely narrow margins while continuing to meet growing community needs. Across Oregon, many hospitals are operating at a deficit, and nationally, federal reports show increasing numbers of Federally Qualified Health Centers (FQHC) mergers and acquisitions due to financial pressures.

While these challenges are widespread, our focus remains on ensuring CHCLC can continue providing care to the more than 30,000 Lane County residents who rely on their services.

To address the Fiscal Year 2026-2027 deficit, CHCLC plans to combine approximately:

• $3 million in one-time revenue sources
• $3.5 million in expense reductions, representing approximately $4 million in annual savings

At the same time, CHCLC is actively pursuing opportunities to strengthen long-term revenue, including:

• Medicaid scope change requests, and Medicare payment adjustments
• Commercial payer contract reviews and fee schedule adjustments

These efforts are expected to generate meaningful revenue, though uncertainty remains regarding future healthcare funding and reimbursement changes.

Several operational strategies will help support sustainability, including

• Restructuring financial and revenue cycle oversight
• Ensuring schedules are filled whenever possible, increasing access for assigned patients
• Continuing to focus on quality metrics during every patient encounter
• Implementing technology solutions that improve care team efficiency
• Using new digital medical records tools to identify and support patients at risk of losing Medicaid coverage and to document medical frailty when appropriate
• Continuing advocacy efforts at the state and federal levels to support Community Health Centers as essential medical homes
• Significant work has already been completed to reduce non-personnel expenses, including:
• Medical supply cost reviews
• Elimination of temporary provider staffing expenses
• Review of all vendor contracts
• Evaluation of interpreter service costs
• Additional review of expenditures

Despite these efforts personnel reductions are necessary to close the remaining gap.

A total of 23 positions are affected by the proposed changes. Eight of these positions are currently vacant. Fifteen positions are currently occupied. As part of that process, more than 15 employees may receive notices indicating that their position is impacted or potentially impacted.

The goal of the CHCLC has been to place as many affected employees as possible into positions for which they are qualified. While there will likely be a limited number of layoffs, it will take several weeks to complete the full process and determine final placements.

Through this process and in months to come, the priority of CHCLC remains to maintain the same high quality level of care to all patients and all decisions will be made in order to pursue a sustainable fiscal environment to support that care.

The Community Health Centers of Lane County is a division of Lane County Health & Human Services and strives to improve the health and wellness of our community through access to affordable, holistic healthcare.