OGDENSBURG – More than 100 employees at North Star Health Alliance are without work after the organization announced sweeping layoffs Monday.
Multiple employees were escorted out of Claxton-Hepburn Medical Campus throughout the day. Some had been employed at the hospital for decades.
It’s something hospital administrators and state officials failed to avoid, despite claims on both sides in recent months that they were working toward a solution that would allow stalled state funding to flow again.
North Star also operates Carthage Area Hospital.
At about 4 p.m. a town hall meeting was held for employees who remained. They were told that 120 jobs would be cut by Wednesday. They were also told that union and hourly employees would receive paychecks, but it was unclear if funds would be available to cover salaried employees.
Those in attendance told North Country This Week that questions were not permitted at the meeting.
Administrators said the cuts were not made lightly, but would allow the hospital to continue operations despite the continued stalled funding from the Department of Health.
“These decisions are incredibly difficult, and we recognize the impact they have on our staff and the communities we serve,” Richard Duvall, President and CEO of North Star Health Alliance, said. “Our focus is to support affected team members while realigning resources to support consistent care delivery across the system.”
Major cuts
Those who lost their jobs include employees who had worked at the hospital for decades, as well as several doctors and providers who have served the community for generations. Although several of former employees spoke with North Country This Week, none were ready to go on record as they were still reeling from the news.
The cuts were organizationwide and included employees at both the Carthage and Ogdensburg hospitals. However, the exact number of employees affected and how services will be impacted remained unclear. Duvall said the cuts were split roughly 50-50 between the two locations, but additional details were limited.
“We understand patients may have questions about how these reductions impact care delivery and health care services,” a prepared statement from the organization said. “While reductions span multiple departments, our focus remains on ensuring patients can access the care they need. During this time, we are committed to supporting impacted employees and our patients.”
News of problems circulated Friday afternoon, when employees who requested anonymity out of concern they could lose their jobs reported that Claxton-Hepburn Medical Campus was unable to purchase supplies and had been cut off by various vendors.
In response to questions about potential clinic closures, Duvall said North Star is evaluating service lines and clinic offerings across the system to better streamline operations and support long-term sustainability.
“Any changes that involve discontinuing or closing a service must follow required State review and approval processes. If any such changes occur, affected patients will be notified directly and supported with referrals as needed, access to medical records, and care transition planning,” he said.
Duvall said employees who lost their jobs remain eligible for COBRA insurance coverage, but no additional severances outside of contractual obligations were provided.
State funding stalled
The payments were intended to support the hospital’s restructuring into a critical access hospital and safety-net model.
The Department of Health had been aware that the transition could temporarily disrupt billing and require close coordination and timely financial support.
That support did not materialize, leaving the system with more than $120 million in unpaid charges and nearly $90 million in accounts payable, with no clear path to resolving the backlog.
State officials have attributed the delay to spending disclosure concerns, saying the department has requested more detailed tracking of funds already issued.
Despite the lapse in state assistance, the hospital has remained open. The situation has drawn concern across the region, as North Star provides critical access to health care and is one of St. Lawrence County’s largest employers.
Since December, the hospital has made payroll once with state assistance and once on its own. With payroll scheduled for Thursday, it appears that only union and hourly employees are expected to receive checks on time.
Although hospital officials met with Department of Health leaders last week, the discussions appear to have been unsuccessful.
Assemblyman Scott Gray, R-Watertown, has been working to bridge the gap between the hospital and the state.
“The Department of Health committed to this plan and they should fulfill that obligation,” Gray said. “At the same time, North Star has to uphold its end of the deal as well. They’ve been on patchwork for a while, making payroll paycheck to paycheck, and now things have taken an unfortunate turn.”
Gray said the ongoing dispute is unfair to employees and the community.
“North Star says they’ve provided what’s been asked for, and DOH says they aren’t receiving that information. I could hear the frustration in the commissioner’s voice when we spoke,” he said.
Gray said he remains committed to fighting for the funding but added that the hospital cannot continue operating two weeks at a time.
Hospital’s response
North Star Health Alliance said it continues to face significant financial pressure driven by rising costs, workforce constraints and ongoing challenges that limit its ability to sustain operations at every site and service line.
“Over the past 18 months, NSHA transformed a single 127-bed hospital into two co-located facilities: Claxton-Hepburn Medical Center, a 40-bed inpatient acute psychiatric hospital, and Claxton-Hepburn Medical Campus, a 25-bed critical access hospital,” the organization said in a statement. “This co-located, right-sized model is designed to strengthen sustainability while preserving access to critical services.”
During that time, the organization said Claxton-Hepburn Medical Center received a four-star Care Quality rating from the Centers for Medicare & Medicaid Services and was recognized by Forbes in late 2025 with a five-star quality rating, while also completing required state and federal regulatory reviews.
“Despite this progress, further adjustments are necessary to support long-term sustainability,” the statement said. “During the transition, NSHA experienced short-term revenue cycle impacts related to required billing transition periods and reimbursement timing, which contributed to near-term financial pressure. Our state-approved transition strategy is grounded in detailed financial modeling and includes a defined path to long-term sustainability.”
North Country This Week will provide more information as it becomes available.