Aurora Mental Health & Recovery is cutting 111 positions—14% of its workforce—citing a state funding model that it says has created an unsustainable financial squeeze. The Aurora center, which serves as the local safety net provider for mental health and substance use treatment in Colorado, is expecting a $6.5 million loss in revenue next year, compounded by a requirement to return $7.2 million to the state because it did not spend as much on care as predicted.
The layoffs include four licensed therapists as well as employees who help clients transition from psychiatric hospitals to living independently, and staff who work with refugees and immigrants who have been trafficked. Beyond staffing cuts, the center is closing a short-term housing program for people transitioning from psychiatric hospitals and eliminating a program that helps refugees and immigrants who are new to the area and have experienced human trafficking.
Colorado changed how mental health centers serving low-income and uninsured Coloradans are paid. For the first two years under the new model, the state pre-pays to cover the anticipated cost of care, then mental health centers must return any surplus. CEO Kelly Phillips-Henry said “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.”
Aurora Mental Health is the first major center in Colorado to point toward the state’s repayment model as the cause of significant layoffs, though staff reductions have occurred at other facilities. About 500 other behavioral health care workers were laid off in the span of three months last year at facilities including West Springs Hospital in Grand Junction and Johnstown Heights Behavioral Health.
State officials disputed Aurora’s characterization, calling it “financial mismanagement” and stating that the funding model is a national one that has worked elsewhere. However, about three-quarters of Colorado’s safety net community mental health centers are operating at breakeven or a loss, according to a survey by the Colorado Behavioral Healthcare Council. The council warned in an April letter to the legislature that the funding structure may not support system stability or maximize federal funding.
Employees were given 60-day notice that their jobs are ending, and staff are working to connect affected clients to other local providers. The center implemented additional cost-saving measures including requiring leadership to take unpaid time off, leaving open positions unfilled, and eliminating two paid holidays.
This article is an AI-assisted summary. All facts and figures are drawn from the original report: https://coloradosun.com/2026/05/05/aurora-mental-health-center-layoffs/