Jefferson Center for Mental Health is shutting down its adult residential recovery program in Lakewood, cutting off a local inpatient option for people dealing with substance-use disorders. The program serves about 150 people a year, and roughly 50 staff members will lose their jobs. Clients already enrolled will be allowed to finish their 30-day stays, the center said.
The center described the closure as a measure of last resort after a year of belt-tightening. In a statement, CEO Sarah Alquist said, "Jefferson Center has taken this painful but necessary step as a last resort." Leaders at the nonprofit told reporters the residential unit is losing about $2 million in Medicaid payments because of a state rate change, and that broader adjustments tied to the prospective payment system (PPS) are expected to cost the organization roughly $8 million in 2026–27. The announcement follows program cuts at other Front Range safety-net providers, according to the Denver Gazette.
Why did the state change payments
State officials point to a new PPS from the Colorado Department of Health Care Policy and Financing that narrows what comprehensive safety-net providers can bill under Medicaid, focusing reimbursements on eight statutorily defined, mostly outpatient services, according to HCPF. Cristen Bates, HCPF's deputy Medicaid director, told the Denver Gazette, "It used to be, anyone could put anything in their cost report that was behavioral health care." Officials said the rate reductions tied to the PPS take effect Oct. 1.
Local fallout and services that remain
The residential unit has offered clinician-led therapy, medication management, intensive group work, and peer support. Jefferson Center's program page notes that it accepts Medicaid, commercial insurance, and self-pay. The agency says it will restructure to protect other programs and will provide compensation and transition resources for affected staff. For program details, openings, and how to access care, see Jefferson Center.
What to watch next
The rate changes are set to kick in this fall, and state officials, providers, and advocacy groups will be watching closely to see whether the PPS model preserves access to higher-cost, bed-based services that community safety-net providers still deliver. Anyone in crisis should call 988 or Jefferson Center's main line at 303-425-0300 for help and referrals.
