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More Changes, Consolidation to Come in Mental Health System

North Carolina’s mental health system has been in flux for 10 years. And it looks like there’s more change to come.

By Taylor Sisk

The future for mental health care services in North Carolina looks like one with fewer agencies managing the dollars and still more upheaval.

There are presently 11 managed care organizations delivering mental health, intellectual and developmental disability and substance abuse services around the state.

Sen. Tommy Tucker (R-Waxhaw)

Sen. Tommy Tucker (R-Waxhaw)

But Sen. Tommy Tucker (R-Waxhaw), a member of the state Joint Legislative Oversight Committee on Health and Human Services, said on Wednesday it’s quite possible that number will soon be reduced.

Tucker said that while he would prefer not to speculate on how many MCOs the state could end up with, it would be a fair assumption that there will soon be fewer than 11.

“We have two or three that are operating very well and would be able to absorb MCOs that are … out there on the outer limits of not being able to operate up to standards,” he said. “So we’ll move forward with that.”

The move to a managed-care model in North Carolina has meant consolidation into fewer regional agencies, and there’s been talk for some time that legislators’ goal was to reduce the number to single digits.

The MCOs, formerly called local management entities, are the regionally based agencies that receive a set monthly payment from the state to provide both state- and Medicaid-paid services. With that money, the MCOs must allot services for everyone under their care.

Dave Richard, executive director of The Arc of North Carolina, which advocates for people with intellectual and developmental disabilities, said on Thursday that while more local control is a generally good thing, fewer MCOs representing consumers across larger geographical areas might not be a bad idea.

“I think we lost local control a long time ago,” Richard said. “I don’t think we should pretend that this is any longer a local system. It is not.”

He said that he’s less concerned with the number of MCOs in the state than with “competence to manage, and that probably requires some additional consolidation.”

Western Highlands next?

Meanwhile, there’s been speculation around the capitol that the next MCO to fall could be Western Highlands, which serves eight Western North Carolina counties – Buncombe, Henderson, Madison, Mitchell, Polk, Rutherford, Transylvania and Yancey.

A meeting has been scheduled for Monday morning in Asheville to which county managers, county commission chairs and the legislative delegation for that eight-county area have been called.

Sen. Martin Nesbitt (D-Asheville), co-chair of the Legislative Oversight Committee for Mental Health, Developmental Disabilities and Substance Abuse Services for close to a decade, had just received notice of that meeting on Thursday and was unaware of what will be discussed.

But of rumors that Western Highlands might be absorbed by Smoky Mountain Center, the MCO for 15 counties surrounding Western Highland’s service area, he said, “They can do it over my dead body. There’s absolutely no reason to absorb it by Smoky.”

Former Western Highlands CEO Arthur Carder Jr. was fired after his board learned the agency was losing half a million dollars a month. Carder is shown here addressing his board earlier this year. Photo credit, Lydia Wilson

Former Western Highlands CEO Arthur Carder Jr. was fired after his board learned the agency was losing half a million dollars a month. Carder is shown here addressing his board last year. Photo credit Lydia Wilson

Nesbitt acknowledged that Western Highlands has been facing some considerable issues. The MCO has been trying to hire a chief executive officer since CEO Arthur Carder Jr. was fired last July. Western Highlands has also been without a chief financial officer and its chief medical officer is soon to retire.

According to a report just released by government consultant Mercer, which contracts with the state’s Medicaid agency to review services, these vacancies and issues with the MCO’s client information system have created a “significant risk” of Western Highlands being unable to operate properly.

“To remain a viable and sustainable managed care organization, WHN will be required to systemically address and resolve each of these challenges within a consolidated timeframe,” the report read.

Also of concern was that Western Highlands was facing a roughly $4.5 million budget shortfall last summer, which led to Carder’s firing.

Addressing the issues

Charles Schoenheit, Western Highland’s chief operating officer and interim CEO, said on Wednesday that the MCO has worked to address these issues.

“Western Highlands is the first MCO that has had to recruit nationally to find a new CEO,” Schoenheit said. “So we’re in a new situation.”

He said a state law requiring that any benefits offered to a CEO candidate be available to all employees has derailed the search. The inability to provide a severance package and a relocation allowance has kept qualified candidates away, he said.

But, he added, Western Highland’s board of directors has approached members of their local legislative delegation about amending that law.

As for the budget shortfall, Schoenheit said, “We have, for several months, reversed that trend, and we’re no longer operating in the red.”

If the current trend continues, he said, that $4.5 million will likely be earned back by June.

Schoenheit said that state Medicaid officials visited on Tuesday, and that he believed they were satisfied that issues addressed in the Mercer report were being addressed.

Of the possibility that Western Highlands would be absorbed by another MCO, he said, “It’s news to me. I haven’t heard that.”

99 percent Raleigh’s fault

Leslie Boyd, president of WNC Health Advocates, said the anecdotal evidence she’s collected suggests that the reason Western Highlands is recovering from its shortfall is that it’s now denying more services.

Another area advocate who asked not to be identified for fear of damaging her relationship with the MCO said, “What we are hearing from the providers in all eight counties is that the majority of their authorizations for new services or renewed services are being denied.”

Map of the state's mental health agencies or LMEs

Map of the proposed mental health agencies in North Carolina. Image courtesy NC DHHS

Nesbitt said that given budget cuts to the MCOs, cuts to services should be expected.

“I know that’s going on, because that’s all you can do,” he said. “One of the first things Western did was say, ‘Can we cut provider rates?’ and they were told ‘no’ in Raleigh. Well, if you can’t cut provider rates, then you’ve got to cut services.”

“It’s a system failure,” Nesbitt said, “and if you look at the history of mental health, 99 percent of the problems have come out of Raleigh.”

The Arc’s Dave Richard said managed care should not mean the denial of services. It should be about “creating an environment where the right services are provided. That may very well mean for some people more service than they were receiving previously; for others, it might be adjusting to get the right services in place.”

But, he said, it should not mean “a wholesale increase in denial of service to eligible citizens who desperately need them.”

Regardless of how many MCOs there are in the state, Richard said, the most critical issue right now is whether they’re competent to manage the services.

“That’s the fear we’ve had all along,” he said, that the state has been moving too quickly to yet another new model for providing mental health, intellectual and developmental disability and substance abuse services, “and that the ability to manage appropriately wasn’t in place.”

Nesbitt isn’t optimistic the ship will soon be righted.

“The mental health system was underfunded to start with, and here we are sucking 20 percent of the money out of it,” he said. “That’s insane.”

“I don’t know,” he added, “maybe we just want to create a system that doesn’t serve people, and we don’t worry about it.”

Reporting assistance provided by Rose Hoban

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6 Comments

  1. annieoMar 8, 2013 at 10:31 am

    the reason for the shortfall is the over use of highly billed unnecessary services, by western highlands LME agencies. they went from a model of “ask for the maximum benefit” which goes agaisnt person centered treatment, then they began an across the board denial. Then it becomes a contest as to who is the best writer and who can sell they’re clients to the approving body as the most extreme cases, becuase that’s who eventually gets the authorization.

  2. Roundup: Sequestration’s State Impacts Include Less Grant, Public Health Dollars; Texas Fight Over End-Of-Life Decisions | 5 For BusinessMar 11, 2013 at 10:02 am

    […] North Carolina Health News: More Changes, Consolidation To Come In Mental Health System The future for mental health care services in North Carolina looks like one with fewer agencies managing the dollars and still more upheaval. There are presently 11 managed care organizations delivering mental health, intellectual and developmental disability and substance abuse services around the state (Sisk, 3/8). […]

  3. State Roundup: Sequestration’s Impacts Include Less Grant Dollars | Health CareMar 11, 2013 at 12:49 pm

    […] North Carolina Health News: More Changes, Consolidation To Come In Mental Health System The future for mental health care services in North Carolina looks like one with fewer agencies managing the dollars and still more upheaval. There are presently 11 managed care organizations delivering mental health, intellectual and developmental disability and substance abuse services around the state (Sisk, 3/8). […]

  4. Help is on the way,be stillMar 12, 2013 at 1:23 am

    what about the consumers we are still left without while the empolyees are money hungery with no compasssion about whether the consumers go to the next level with housing or motivation for work cause their human spirit has been robbed of geniue respct while being discriminated in you face to ffeel like whose job is it any way ,asking for help from these agencies mak,es me want to flip out but Gods grace and mercy keeps me looking to the hiills from whiich our help comes from,sitting back being still till God say move , Being asking for help since 2011 its 2013 look at God shift the atrnosphere. the last are going to be first and the first last it is written.

  5. More Changes, Consolidation to Come in Mental Health System … | Fidly.comMar 12, 2013 at 7:50 pm

    […] Meanwhile, there's been speculation around the capitol that the next MCO to fall could be Western Highlands, which serves eight Western North Carolina …www.northcarolinahealthnews.org/…/more-changes-consolidat… […]

  6. SickofthissystemMar 14, 2013 at 8:21 pm

    ECBH is denying services in the east and their provider network is on life support. No one cares about the consumers who need our services. It’s all about making a profit.

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