Map of the state's mental health agencies or LMEs
Map of the proposed mental health agencies in North Carolina from late 2011. By that time, Cardinal Innovations' footprint had grown from five counties to 15. Eventually, the organization would manage mental health care for more than 20 counties before boards of commissioners started pulling their constituents out. Image courtesy NC DHHS

By Rose Hoban

Three mental health agencies have gotten the green light from state officials to delay their transition to the new managed care model required by state law.

Alliance Behavioral Healthcare, Partners Behavioral Health Management and Centerpoint all asked the state Department of Health and Human Services last week if they could move their “go-live” dates for the transition from Jan 1 to Feb 1. Al Delia, acting Secretary of Health and Human Services sent letters late Friday giving the agencies permission to delay.

Map of the state's mental health agencies or LMEs
Map of the new mental health managed care organizations in North Carolina. Image courtesy NC DHHS

The extra time will cost the state about $5.7 million in lost savings from the three agencies.

As a result of legislation passed in the summer of 2011, the state’s mental health agencies have been compelled to make a transition from service coordination agencies to managed care organizations (MCOs), which essentially act as small insurance companies. The new MCOs will receive a set monthly payment for each patient and will have to provide services for everyone under their care using that pot of money.

The three agencies combined cover mental health services for people in 16 counties.

Part of the delay is a result of having to start from the beginning in credentialling and certifying service providers, such as therapists, hospitals and small local mental health provider agencies said Alliance spokesman Doug Fuller.

“We have more than 1500 providers going through the credentialling process,” Fuller said. “It’s a time consuming process to carefully check credentials, receive feedback from the state, to insure that each provider is in good standing with all of the divisions of the Department of Health and Human Services.”

Before the forced transition, Alliance was a single county agency covering only Durham, and had about 250 providers in its network. Now, Fuller said agency officials are sifting through almost 2000 applicants from providers in Durham, Wake, Johnston and Cumberland counties.

“And we had to start from scratch,” Fuller said.

“Throughout this past year of implementation, we’ve been learning of the obstacles that the MCOs were encountering,” said DHHS spokeswoman Julie Henry.

“Centerpoint has a lot of hospitals in their area, and has a lot of providers, like 1200,” Henry said. “It’s made for a lot of extra work and I know there’s some conversation about streamlining the process so if you’re credentialed for one MCO you could be credentialed for another, but that doesn’t exist right now.”

Other MCOs have had to delay their transitions. Sandhills Center was supposed to make the switch in July, but was delayed until October, and again until January. The transition for MeckLink – the MCO for Mecklenburg County – has already been pushed off until Feb 1, and state officials have expressed concern that MeckLink will miss that target as well.

“The statutory deadline is actually July 2013,” Henry said. “We set these last implementations for January so it would allow us the flexibility to grant us an extension or delay so we could delay and stay within the deadline.”

But each delay costs, on average, $750,000 per month, per agency, in lost savings to the state according to a presentation made by state officials to the General Assembly in September.

“It will impact the projected savings,” Henry confirmed. “It’s just taken a lot more time than they expected it to.”

Fuller also said his agency was testing new software that they’ll be using to track payments and cash flow.

“It’s important that we manage our risk, that we understand what our financial picture on a day to day basis, as well as monitoring provider outcomes,” Fuller said.

Poor management of financial information was one of the problems behind more than $3 million in losses over a 6 month period at Western Highlands Network, an Asheville-based MCO that covers eight counties.

The delays and the losses at Western Highlands have lead to fingerpointing by critics of the transition who say that the timeline set by the General Assembly was too aggressive.

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Rose Hoban is the founder and editor of NC Health News, as well as being the state government reporter. Hoban has been a registered nurse since 1992, but transitioned to journalism after earning degrees...