San Antonio-based Laurel Ridge Treatment Center, a 330-bed behavioral health facility owned by King of Prussia, Pa.-based Universal Health Services, will lay off approximately 648 employees weeks after CMS terminated its Medicare provider agreement.
CMS said it will terminate the facility’s Medicare agreement April 30 after determining it failed to substantially comply with Medicare and Medicaid health and safety participation requirements, according to the April 15 notice from the agency. In response, the treatment center filed a civil complaint in the U.S. District Court for the Western District of Texas to prevent HHS from “taking this action imminently.” The court denied the temporary restraining order and preliminary injunction.
The facility said the layoffs are expected to take effect June 26, with notice affected workers provided April 27, according to a WARN notice letter filed with the Texas Workforce Commission.
Medicare will not pay for services for residents admitted on or after April 30. For residents admitted before that date, payment will continue for up to 30 days of covered services after April 30. Federal Financial Participation for Medicaid residents will follow the same timeline, according to CMS.
A UHS spokesperson said in a statement shared with Becker’s that “CMS recently notified Laurel Ridge that its Medicare provider agreement will be terminated effective April 30, 2026. We are deeply disappointed by this outcome and recognize the significant impact it will have on our dedicated team members and the communities we serve. As a result of this regulatory action, we must implement a workforce reduction. Support resources are being provided to impacted employees during this transition period, including career fairs.”
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