Mental health and substance use treatment provider SouthLight could lose $1.5 million in federal funds

The nonprofit mental health and substance use treatment provider SouthLight is among four organizations in Cumberland County affected by the U.S. Department of Health and Human Services’ pending cuts of pandemic-era funding. 

Of the total $230 million in grants the federal agency is revoking from North Carolina, SouthLight CEO Adam Hartzell told CityView that as much as $1.5 million going to the nonprofit is in flux. Programs at Cape Fear Valley Health and Fayetteville State University and three contracted staff members at the Cumberland County Department of Public Health are also at risk of losing funding.

The $1.5 million helps SouthLight care for low-income and unhoused patients without insurance. It also funds the nonprofit’s Fayetteville office and the building of its electronic medical records system.

“SouthLight has been around for more than 50 years, so we will adapt and figure a way through and figure a way to serve people,” he said. “But we may not be able to do all that we know it takes to really help people in the best possible way. It might impact the types of services we can offer, the number of services we can offer and the number of uninsured patients we’re able to accept.”

The funding comes from the Block Grant for Community Mental Health Services program, which is run by the Substance Abuse and Mental Health Services Administration (SAMHSA), one of the 13 agencies under HHS. It’s a three-and-a-half-year grant, and SouthLight is in year three, meaning the $1.5 million is what is still left for the nonprofit to draw down.

SouthLight hasn’t lost the funding yet. The cuts are on hold as a lawsuit brought by North Carolina Attorney General Jeff Jackson, 22 other state attorneys general and the attorney general for the District of Columbia works its way through the U.S. District Court for the District of Rhode Island. 

However, SouthLight currently can’t access its remaining federal grant dollars. Hartzell said the North Carolina Department of Health and Human Services has indicated it will try to provide additional state money to SouthLight so none of its services are disrupted, but no promises have been made.

“We don’t know what’s going to happen in the future,” Hartzell said. “And that uncertainty makes it very difficult for us to answer the questions of the people we’re already serving and to plan ahead for next year.”

Care for Fayetteville’s most at-risk populations could decrease

SouthLight recently expanded into Fayetteville, opening an office off Ramsey Street near downtown to serve Cumberland and Harnett County residents. The office provides therapy, veteran services, office-based opioid treatment, community and peer support and medication management. 

The nonprofit uses funds from the block grant to pay for the lease on the Fayetteville office. The grant also pays for the overhead costs, like utilities and furniture.

Grant funding also helped pay for the care SouthLight provides to those who are unhoused and uninsured, who have little to no means of paying for it. SouthLight is in the process of becoming a certified community behavioral health clinic, and its expansion into Fayetteville was a step in its certification. Certified clinics must provide crisis care, comprehensive access to providers and coordinated care that addresses mental and physical health to anyone, regardless of their ability to pay for the services.  

Of the Cumberland County residents that SouthLight now serves, almost 11% are uninsured, according to the county’s 2024 Community Health Assessment. The county’s most recently available Point-in-Time Count, the annual 24-hour census of the county’s homeless population, found that the county has 374 unhoused residents. 

However, the Fayetteville-Cumberland County Continuum of Care (CoC), a homelessness case management organization, says the number is higher. Between October 2022 and September 2023, the organization served 800 individuals.

Without the funding, Hartzell said SouthLight might have to reduce its services. But he said the organization’s presence in Fayetteville isn’t in jeopardy.

“SouthLight is absolutely committed to staying in the Fayetteville community,” he said. “We’re going to work with local people in that community, as well as the people at the state, to make sure that we can meet our obligations in the Fayetteville area.”

Concerned about the loss of Medicaid expansion

The HHS cuts aren’t the only potential funding losses Hartzell is concerned about. Last week, the U.S. House passed the Republican-developed budget framework that includes at least $880 billion in cuts over the next decade to the House Energy and Commerce Committee, which manages Medicaid. Experts from KFF, an independent health policy organization, say it’s impossible to meet the requirements without cutting federal Medicaid funding.

North Carolina’s Medicaid expansion is immediately at risk if the federal government decreases its share of funding. The law states that, if the federal government funding drops below 90% of the costs of the newly eligible North Carolinians, the state will stop covering the expanded population “as expeditiously as possible.”

Hartzell said losing Medicaid expansion would hit SouthLight hard. Since the expansion, which took effect in December 2023, the number of the nonprofit’s patients covered by Medicaid has increased by 25%. He said Southlight couldn’t afford its current level of care for patients without those Medicaid payments.

“A cut to Medicaid means many more people will not be able to receive services, even at a nonprofit like SouthLight that’s absolutely committed to serving those folks,” he said. “Because it means we cannot offer as much service as frequently to as many people as we can with Medicaid.”

Hartzell said there would be downstream impacts without an organization like SouthLight caring for these residents, including more calls to emergency medical services and crowded emergency rooms, higher crime rates and increased homelessness.

The Cape Fear Valley Medical Center’s adult emergency department is already the busiest in North Carolina and one of the busiest in the country, seeing over 60,000 patients a year. An average visit to the center’s ER lasts 3 hours and 45 minutes, which is over half an hour more than the national average, according to Medicare.gov.

Though the city’s crime rate decreased by 5% from 2023 to 2024, Fayetteville subsequently saw eight murders in the first 24 days of January 2025. (The murder of retired Special Forces soldier Clinton Bonnell has captured local and national attention.)

While homelessness in Cumberland County decreased from 2023 to 2024 by about 23%, new encampments are popping up in Spring Lake. Debbie Brown, chair of the CoC, previously told CityView the county has 17 known encampments.

“The need is there,” Hartzell said. “Whether the funding is there or not.”

CityView Reporter Morgan Casey is a corps member with Report for America, a national service program that places journalists into local newsrooms. Morgan’s reporting focuses on health care issues in and around Cumberland County and can be supported through the News Foundation of Greater Fayetteville.