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Presbyterian Healthcare Services said Tuesday it will discontinue most of its Medicare Advantage plans beginning in 2027 and eliminate 150 administrative positions, the latest moves by a health system that has in recent years grappled with mounting financial losses and a failed merger attempt.

The sa国际传媒官网网页入口-based health system said the moves are proactive steps to preserve its financial footing and its status as an independent provider of healthcare across the state.

Rishi Sikka, Presbyterian CEO, said in an interview with the Journal that the health system plans to keep its Medicare Advantage Dual Plus Special Needs Plan, which serves about 13,000 people who receive both Medicare and Medicaid benefits. The cuts to its other plans, effective next year, will impact 30,000 members.

In moving to cut those plans, Presbyterian will void about $59 million in annual losses, which was 鈥渢he loss profile last year鈥� tied to Medicare Advantage, Sikka said.

A staff meeting was held earlier Tuesday, when the affected staff of the health system鈥檚 insurance arm, Presbyterian Health Plan, were informed of the layoffs. Sikka said cuts to those teams 鈥� spanning Medicare Advantage sales, IT configuration, project management and operational roles 鈥� were effective immediately.

Sikka said Presbyterian will offer severance and transition support, as well as the opportunity for terminated employees to apply for other open roles within the organization. The health system overall employs about 14,000 workers. 

鈥淭his decision is not impacting any clinical roles, nor is it impacting anything around the delivery of care,鈥� Sikka said. In a separate statement from the company, Presbyterian noted it is actively trying to fill about 870 open clinical positions across its nine hospitals and scores of clinics.

Sikka added that Presbyterian is not yet able to 鈥渆ngage in a proactive outreach process鈥� with affected Medicare Advantage members until fall open enrollment, which begins in October.

鈥淭hat is going to be the opportunity where we will be able to proactively talk with all of our current members who receive their care with us and show them all the other alternatives that our organization contracts with, so that they can have continuity of care,鈥� Sikka said. 鈥淭here will be several alternatives for them in that regard.鈥�

The announcement comes against a backdrop of recent financial strain for New Mexico鈥檚 largest health system.

Presbyterian posted back-to-back losses in fiscal years 2022 and 2023 鈥� spending roughly $157 million more than it brought in during 2022, followed by a $159 million net loss the following year. Its most recent tax filings for the 2024 fiscal year showed the health system had a bit of a turnaround with a net income of $84 million, meaning it brought more money in than it spent.

The announcement also comes following a failed merger between Presbyterian and Iowa-based UnityPoint Health in October 2023, just over half a year after the two health systems made the announcement in what they said was a consolidation of administrative services.

Sikka on Tuesday downplayed any connection between that merger and its cutting of staff and Medicare Advantage plans, saying the recent moves are 鈥渧ery forward-facing鈥� and 鈥減roactive鈥� decisions to 鈥渆nsure we have the ability to increase access to care.鈥�

But the combination of the collapsed merger, its recent losses and the retreat from offering Medicare Advantage plans next year will likely give more ammunition to Presbyterian鈥檚 critics.

Sikka disagrees.

鈥淚 think it is (viable), and I think it鈥檚 also the best thing for the communities we serve, and for our state,鈥� Sikka said, referring to keeping Presbyterian independent. 鈥淲hat we鈥檒l start to communicate in the coming weeks and months ahead is the investments we will be making to expand access.鈥�

Matthew Narvaiz is the Journal鈥檚 business editor. You can reach him at mnarvaiz@abqjournal.com.