AURORA, CO, April 30, 2026 –
Aurora Mental Health & Recovery (AMHR) is reducing its workforce by 111 positions, 14% of our workforce as of June 30, 2026. The organization has filed a Worker Adjustment and Retraining Notification (WARN notice) with the State of Colorado. Sixty-six of the affected positions are administrative and support positions; only four are roles that provide direct client care.
“AMHR is taking this action with a heavy heart,” said Kelly Phillips-Henry, CEO. “State reimbursement changes and federal Medicaid reductions resulting from HR 1 translate to a $6.5M reduction in anticipated revenues for our next fiscal year beginning July 1. In addition, we face a $7.2M reconciliation payment required under the state-directed Medicaid payment methodology for the current fiscal year. We simply can’t afford a $13M-plus hit to our bottom line and a future predicated on a break-even payment model without making significant changes to our expenses, including staffing.”
Phillips-Henry explained, “Our executive team strove to meet this moment by containing costs. We’ve done so by instituting mandatory furloughs for AMHR Leadership; leaving open positions unfilled; eliminating two paid holidays; and reducing travel and other administrative expenses. We also identified duplicative roles across teams and are consolidating responsibilities where possible. These actions have enabled us to shave our expenses by $1.425M, which translates to 22 positions we have been able to retain. Unfortunately, those cost savings are not enough to fill the gap we face.
Phillips-Henry added, "Colorado's safety net behavioral health system rests on a payment model that threatens our ability to serve the people who need us most. That must change. Safety net providers need stability in order to continue serving our communities, especially the most vulnerable among us." She emphasized, “While AMHR is performing ahead of our current year budget and our financial position is strong with available cash needed, this downward pressure in the form of a rate reduction will impact us immediately in FY2027 (beginning July 1, 2026). Our current payment model, directed by the state's Department of Health Care Policy and Financing, is designed to pay providers at cost with no operating margin, leaving no ability to sustain programs that cannot fully cover their own expenses.
In addition to reducing administrative positions, AMHR is also forced to close the following programs that do not have sustainable funding sources from the state:
- Aurora Sustained in Forensic Services
- Mrachek and Thomas Houses in Residential Services
- Residents of Mrachek House will be allowed to continue living in the House, as the US Dept. of Housing and Urban Development manage it; however, the behavioral health services offered by staff through AMHR’s license from the Colorado BHA will be eliminated.
- Adult Education** in Cultural Development & Wellness Center
- Victim Assistance in Cultural Development & Wellness Center
- Youth Leadership Academy in Cultural Development & Wellness Center
Phillips-Henry added, "We are devastated by these painful but necessary actions. The programs we are forced to close provide important services to valuable members of our community. We will continue to look for opportunities for funding that would allow us to support those services in a financially viable manner in the future. AMHR is committed to ensuring that no client experiences a gap in care as a result of these closures. The organization will work closely with staff, community partners, the Behavioral Health Administration, and payers to connect all affected clients with continuity of services during and after this transition."
AMHR is providing all affected employees with a 60-day notice period, severance, outplacement services, and other assistance, and will allow them to apply for remaining vacant positions for FY27.
