Oklahoma Mental Health Agency Cuts Over 300 Provider Contracts Amid $40M Budget Shortfall

The Oklahoma Department of Mental Health and Substance Abuse Services is implementing major budget cuts that will result in the cancellation or reduction of over 300 provider contracts, affecting mental health and substance abuse services statewide. Interim Commissioner Gregory Slavonic confirmed that the agency has been operating beyond its budget capacity and undertook a detailed review of nearly 800 contracts to identify $40 million in cuts necessary to stabilize finances. These reductions come after a financial crisis earlier in the year, which included the use of current fiscal year funds to pay previous year obligations and led to the removal of former commissioner Allie Friesen despite objections from Governor Kevin Stitt. Providers and advocacy groups express concern about the significant impact on communities, with some warning that service losses and staff layoffs are inevitable. The agency aims to protect essential services aligned with its mission, but uncertainties remain about the full scope of the impact and the sufficiency of the cuts to resolve the budget shortfall. Contract cancellations and reductions will take effect starting October 1, as the department continues working with affected vendors.