North Star Health Alliance, a regional health system in Ogdensburg, N.Y., is facing a financial challenge that could result in program cuts, job losses and facility closures, without funding support from the state.
“As the New York State Department of Health, the New York State Division of the Budget and members of your team have heard over the past few months, we are on the precipice of closing programs, eliminating services, cutting jobs and, quite possibly, facing imminent closure,” Richard Duvall, CEO of North Star Health Alliance, said in a Dec. 3 letter to New York Gov. Kathy Hochul, North Country Now reported Dec. 4. “In short, our facilities will not be able to make payroll next week.”
North Star Health comprises Carthage (N.Y.) Area Hospital, Ogdensburg, N.Y.-based Claxton-Hepburn Medical Center and Medical Campus and Watertown, N.Y.-based North Country Orthopaedic Group, according to its website. It has 1,700 employees and a $5.5 million biweekly payroll, WWNYTV reported Dec. 4.
Brandon Bowline, chief of staff for North Star Health Alliance, told Becker’s that the organization’s challenges reflect broader national trends, including declining acute-care volumes and increasing demand for behavioral health services.
In August 2022, North Star presented state health officials with a plan to consolidate services in Ogdensburg into two co-located hospitals: a 40-bed behavioral health hospital and a 25-bed critical access facility. Regulatory agencies, like the state health department and CMS, have backed the transition, with the system receiving confirmation of its critical access status the week of Dec. 1.
However, the hospitals have been unable to bill for specific services for extended periods, leading to a “billing blackout” that has strained finances. Mr. Bowline said North Star was counting on deficit funding from the state to bridge the gap, but that has stalled.
“We have some funding shortfalls that we need assistance with from the state, and as soon as that falls in line, we are financially filed in the outlying years,” he said.
A spokesperson for Ms. Hochul said in a Dec. 4 statement shared with Becker’s that the Carthage and Claxton-Hepburn facilities have not provided basic information needed to verify claims and funding requests to the state for taxpayer dollars, like updated organizational charts, audited 2024 financial statements, how state funding has already been spent and an accounting of intercompany transfers.
“Since 2024, Gov. Hochul has provided more than $9.5 billion in supplementary funding to safety net hospitals statewide, including $142 million for Carthage and Claxton-Hepburn,” the spokesperson said.
While Mr. Bowline declined to speculate on a specific timeline for when the financial situation could become untenable, he said North Star is doing everything possible to make payroll and maintain operations.
“We’re doing everything in our power, working with the state and elected officials, to come to a resolution that the state will come forward with funding they have promised us,” he said.
Becker’s has reached out to the state department of health for comment and will update this story should more information become available.
