StarVista facing financial issues

CEO Sara Larios Mitchell is also on leave, though acting CEO Shareen Leland did not specify on whether it was related to the layoffs and furloughs.

“For the last six months, StarVista has really faced significant financial challenges, and we took many steps to address those issues,” she said, citing office consolidation and program closures made over the past year. “We focused the cuts more on the administrative area of the organization to ensure that we would provide as much program continuity as possible.”

The county maintains several contracts with StarVista for numerous services, including mental health counseling, crisis intervention and recovery programs. Since 2021, the nonprofit has received about $47 million from San Mateo County, according to the county ledger. 

David Canepa, president of the San Mateo County Board of Supervisors, has previously served on the StarVista board and said the financial predicament is partially related to a change in Medi-Cal reimbursement payments, known as CalAIM, which have affected some services, like its detox center that was shut down last year. 

“They’ve been an integral part of the county. We rely on these nonprofits. … To see what has happened to StarVista, as the Board of Supervisors president, is something that I’m monitoring and am very concerned about,” Canepa said. 

However, the county gave behavioral health contractors about a year to adjust to the changes, with the new payment system going into effect last July.

CalAIM changes were also cited as the main reason for the sudden closure of Redwood House last year, a former crisis residential center operated by Caminar, another large behavioral health contractor. The county did not provide additional funding for Redwood House to stay afloat, and it’s unclear whether it will step in if more behavioral health providers find themselves in similar predicaments.  

Leland said the financial challenges StarVista faces are in part related to CalAIM but not entirely. The organization anticipates its revenue will be about $2.5 million less than originally projected, a situation that has become more acute in the last six months. In addition to Medi-Cal reimbursement changes, she said workforce shortages have also affected revenue. 

The financial challenges come less than two years after its former clinical director Clarise Blanchard was charged with embezzling about $700,000 from the nonprofit for about 13 years. Blanchard allegedly funneled the funds, which were supposed to be donations, to a personal account. 

Canepa said he is open to discussing additional financial support for the county’s behavioral health services, given recent trends, but fiscal uncertainty at the state and federal levels has created more challenges for the county. 

“I’m open to any solution if that includes the county. It’s just real difficult in light of the pressures that local governments are facing relative to budgets,” Canepa said. “There should be an assessment and evaluation done by these [community-based organizations] to see if there is a way in which they can partner together and merge.”