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Everybody is Watching as NC Transforms Mental Health System

Without a doubt, North Carolina is taking a gamble in transforming all of the state’s mental health local management entities into managed care organizations. If the effort succeeds, North Carolina stands to become a national leader in solving the problem of Medicaid financing for mental health services.

If the effort fails, it could cost billions to fix it.

Fourth in a five part series on changes in North Carolina’s mental health system.

By Lydia Wilson

On a sunny day in early February, 85 people crammed into a conference room at a regional health education center in Asheville, N.C.

The attendees came because, as of the new year they had a new boss.

Mental Health 3.0 series ImageThese group home operators, therapists and other professionals used to bill the state for services they provided to people with intellectual or developmental disabilities who live in eight western counties — Buncombe, Henderson, Madison, Mitchell, Polk, Rutherford, Transylvania and Yancey.

Now, they are obligated to bill through the new managed care organization, Western Highlands Network. They’re applying to be contractors and sending their invoices to the Asheville-based agency for approval.

Fear of being thrust into a new way of operating so quickly prompted many of the providers to come ask questions. Their eyes were all on Jesse Smathers, clinical director for intellectual and developmental disability services.

Smathers’ role is to approve or deny requests for service made by all these providers. He said that he is still figuring out how some of those decisions should be made based on 247 pages of new rules from the state.

About five minutes into the meeting, someone leaned against a light switch on the wall, and the room went black.

“And we just thought we were in the dark,” quipped Smathers.

The gatekeeper

Western Highlands Network processed 45,000 individual claims for payment worth $5.5 million in its first two months of operation as a managed care organization.

That’s a lot of work.

Western Highlands Network CEO, Arthur Carder, Jr. leads a board meeting.

Western Highlands Network CEO, Arthur Carder, Jr. leads a board meeting. Photo by Lydia Wilson

To make it happen, Western Highlands Network has already hired at least 53 new people. Some of the staff answers consumer questions on the phone while others work with family and consumers outlining the steps for caring  for people with sometimes multiple disabilities.

Though Western Highlands Network staffers report that everyone is busy, most acknowledge that the real crush happens in the department where Jesse Smathers and others work: “Utilization Management.”

That department’s role is to ask providers questions about why certain services are proposed. That’s the key new function in the managed care model.

CEO Arthur Carder, Jr. said that taking on utilization management allows Western Highlands Network to provide financial and medical accountability that will result in better services for consumers with mental health, intellectual or developmental disabilities in Western North Carolina.

“What this process is doing is holding the system accountable in a much more detailed manner than had been done in the past,” Carder said, referring to the previous arrangement when an out-of-state contractor, ValueOptions reimbursed providers for the state.

But some providers think  those questions are standing in the way of mental health consumers’  wellness.

Not a week goes by,” said Trip Woodard, an independent therapist in Arden who contracts with Western Highlands Network, “that I don’t get a phone call from two or three people — usually single parents — who are distraught and who are upset. They are simply looking for help for their children and they’re not getting it.”

“What this process is doing is holding the system accountable in a much more detailed manner than had been done in the past.” – Arthur Carder, Jr., CEO of Western Highlands Network. One of those parents (who asked not be named to protect her son’s identity) said she feels Western Highlands Network is asking her “to jump through hoops that don’t exist.”

The mother said her 15-year-old son was molested and battles emotional and behavioral problems. His therapist recommended a residential intensive therapy program. That kind of care is expensive.

The mother said while trying to get approval, she was bounced back and forth between the non-profit agency in charge of her son’s case and Western Highlands Network.

She is now exasperated and fears her son’s behavior will deteriorate if he is not able to continue the progress he made in a similar residential program he attended briefly on a private scholarship.

When asked about the boy, Marilyn Kaylor of Western Highlands Network said  she could not discuss specifics of a consumer’s confidential case. But, she said the agency has steps in place to help consumers and all are encouraged to call its 24-hour access line to ask for clarification.

Since mid-March, 16 official complaints have been filed with Western Highlands Network, according to a report in mid-March. That same report showed 104 complaints were filed with PBH, the managed care agency for 15 Piedmont counties.

“Providers are greatly undervalued.”

Woodard, the Arden therapist, said he worries that it will only get harder for consumers to access services because qualified providers are abandoning the publicly funded system. He presented 17 emails from therapists who told him they had stopped taking Medicaid since the news of the changes.

Trip Woodard, LCSW, Asheville, NC Photo by Lydia Wilson

Trip Woodard, LCSW, Asheville, NC Photo by Lydia Wilson

“There have been several ‘pay days’ that have come and gone with no money, or only one out of 20 claims paid,” emailed Asheville-based social worker Amanda Bucci on March 20.

“I know Western Highlands Network is overwhelmed (as am I) and ill equipped (as am I) to handle the volume and demands put upon them,” Bucci wrote, “but their nonchalant attitude and excuse-laden responses to our queries about when we will be paid, and thus able to meet our own financial obligations, adds insult to injury.”

A state report showed that Western Highlands  paid properly submitted claims within an average of 6 days, faster than the 7.4 days it took PBH. But both the state and Western Highlands Network recognize that some work takes longer, sometimes too long.

Many providers are also upset that they must now buy more liability insurance coverage. Therapist Chandra Passero of Weaverville said would cost her an additional $350 a year. Woodard also said his paperwork burden has tripled.

At the March 2012 board meeting, CEO Arthur Carder, Jr. defended the new requirements, saying Western Highlands Network asks providers to do more work for a reason.

“I expect a Licensed Independent Practitioner who says, ‘I am going to take on your care and support,’ to have a plan of care in case that consumer needs help at 2 in the morning,” said Carder. “I want to know that this provider is not going to dump this person in the emergency room.”

Western Highlands Network does meet monthly with some providers to create dialogue about problems and offer updates on state and local policy. Providers recently asked if reimbursement rates could be increased for providers who want to work in rural areas but with gasoline prices nearing $4 a gallon, can’t afford the travel.

“Not a week goes by that I don’t get a phone call from two or three people — usually single parents — who are distraught and who are upset.” – Trip Woodard, independent therapist who contracts with Western Highlands Network. Western Highlands officials said they are considering that request.

A representative of the N.C. Department of Health and Human Services, Bill Bullington, spoke to the Western Highlands Network board in March, saying that the agency has actually been instrumental in making things easier for providers.

Western Highlands Network proposed the creation of a consolidated database where providers could complete one application to be considered by any managed care agency, rather than duplicating work.

“The state currently has no issues of concern with Western Highlands Network,” said Bullington. “It is more interested in the lessons learned from what Western Highlands has gone through, and they are valuable lessons.”

Carder said  his job at Western Highlands  is not to change the legislature or change the federal government, but to manage the new Medicaid waiver.

“It is a managed system today as opposed to an unmanaged system that we had a year and a half ago,” said Carder. “That is a good thing for the consumer.”

The wildcard -  Obamacare

President Obama signing the Affordable Care Act, March 24, 2010. Photo courtesy Keith Ellison, Flickr Creative Commons

President Obama signing the Affordable Care Act, March 24, 2010. Photo courtesy Keith Ellison, Flickr Creative Commons

North Carolina could enroll 500,000 more people in Medicaid if the federal health care reform law endures its challenge in the US Supreme Court. All states will see similar influxes of new Medicaid enrollees in 2014, and many of those states are looking to see if Medicaid waivers can be used to manage public funds to implement the health care reform legislation. Oregon’s governor signed legislation just last week mandating that state’s Medicaid program implement waivers in it’s system.

Just months into the implementation of the waiver in January, Western Highlands can report only limited statistics about whether or not its implementation is replicating PBH’s reported financial savings while benefiting consumers. A third managed care agency , Eastern Carolina Behavioral Health, started operations on April 1, 2012.

North Carolina is the only state implementing the waiver so ambitiously, statewide and for three categories of Medicaid services: for people with mental health issues, with substance abuse disorders and for people with intellectual or developmental disabilities.

The NC Department of Health and Human Services takes pride in the potential for the state to be a national leader in managing Medicaid funding.

DHHS staff member Ken Marsh said he thinks that PBH may have cracked the code of providing the state’s Medicaid mental health enrollees effective services while responsibly managing taxpayers’ money.

We have received periodic calls from other states,” said Marsh. “Louisiana was calling to check the model out.”

North Carolina’s legacy of innovation could be determined by its ability to replicate and sustain the results achieved by PBH  as soon as January 2013.

Tomorrow: Auditor reports show the state’s new mental health managed care agencies are struggling to meet legislator’s ambitious new mandates.

Mental Health 3.0 is adapted from Lydia Wilson’s thesis for a Masters in Journalism from UNC Chapel Hill’s Medical Journalism Program.

The title image is adapted from a portrait of Dorothea Dix, a 19th century crusader for better mental health care, that hangs at the National Portrait Gallery.

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2 Comments

  1. fmillmdMay 13, 2012 at 8:39 am

    Another 10 year old prediction that was made by yours truly and dozens if not hundreds of providers of all disciplines in the 1999-2001 era of when this for sale spreadsheet plan of reform sold to other states, implemented in MI, MD etc., and rammed down the legislature’s and publics throats, if any informed citizen who read of all this in those days, without public comment period, was that there was NO ONE at the SWITCH OVERE! No one to audit what would happen, how the money was spent, would community funds actually be made available as monies were ‘saved’ by deleting them from the state mental hospital budgets and ‘cards.’ What we got instead was Charlie FRanklin CEO in an Eastern LME and Tom McDevitt of Smoky Mtn MHC/LME/HMO who operated unsupervised for 15 years or so with his real estate broker wife head of the “Evergreen Foundation” sister organization to SMMHC as they bought all the properties without bidding processes or public input and leased them back to the MHC at unreviewed rates and profits. This is what we got with privatization of public mental health care in NC. Pirvateering bandits. Sames as AZ, MI and MD.

  2. McLerothMay 29, 2013 at 11:16 am

    The latest version (Edition 4, dated 5/28) of the LME/MCO bill (SB 208) in the general assembly allows only “area authorities,” and not counties to administer the 1915(b)(c) waiver. This is a change from the previous version.

    The upshot? It appears our representatives wish to put one of the LME/MCO’s, the one that serves Mecklenburg, out of business through legislation, perhaps throwing that catchment to a neighboring MCO.

    This seems like a rather unjust action, and pretty untimely as the 1915(b)(c) waiver is about to hit its federal deadline.

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