The Department of Public Health and Human Services said Thursday that it will continue to provide targeted case management services to Montana's developmentally disabled population despite state budget cuts.

The department made that pledge the day after four case management providers whose contracts will be terminated this spring raised concerns about the quality of services after 80 of their employees are laid off as a result of the cuts.

The contracts are being eliminated as the health department changes its service model to use just state employees and not nonprofit agencies to provide case management for the developmentally disabled. That change will save an estimated $2.5 million.

DPHHS “is committed to serving developmentally disabled clients who receive targeted case management services. This is an integral part of ensuring these individuals receive the services they need to remain in the community," director Sheila Hogan said in an emailed statement.

She said the department "will be able to continue to deliver targeted case management to 2,700 individuals at a minimum. For those who will be impacted, we are currently working on a transition plan."

The state now contracts with four nonprofit agencies who provide targeted case management to an estimated 2,200 people who have developmental disabilities. Those agencies learned in a conference call Dec. 21 that their contracts would end March 31. The call, which included people who would be losing their jobs, was the first notification that the state was terminating contracts.

The four providers — A.W.A.R.E., Opportunity Resources, Helena Industries and Central Montana Medical Center — were contacted by Lee Newspapers on Tuesday and Wednesday. They said they were in the process of telling employees who would lose their jobs and notifying clients that changes were coming.

Only Central Montana Medicaid Center said its three case managers would be able to find jobs elsewhere in the hospital. The rest estimated layoffs of around 25 employees per agency.

Case management includes an array of services that help people do everything from signing up for federal health insurance coverage and Social Security benefits to finding and maintaining housing and jobs. Managers also help their clients get to medical appointments, take medications and navigate other issues.

The health department has provided targeted case management from offices in Helena, Missoula and Billings. The department said Thursday it will pick up the people who will no longer get services from the nonprofit agencies, for a total of about 2,700 people who will get targeted case management from the state by April.

Case managers with the nonprofit agencies were skeptical the state could continue to provide the same level of service people had been receiving and questioned how manageable the DPHHS workloads would be.

The health department is entering a transition phase and is developing details of its transition plan, including identifying people who will be affected. More information will be announced in coming weeks.

Because of budget cuts, people who are not Medicaid-eligible will not receive targeted case management services, though it's unclear how many people that is. 

The change is necessary to meet a $49 million budget cut enacted during a special session of the Legislature in November. The special session was called to address an anticipated $227 million hole in the state budget.

The health department accounts by far for the bulk of state spending. DPHHS, along with corrections and education, make up 85 percent of the state's general fund budget.

The health department is also decreasing targeted case management rates for children's mental health, adult mental health and substance abuse services. That reduction of $1.8 million was automatically triggered when state revenue came in lower than expected.

One provider in western Montana has announced layoffs citing those rate reductions.