By Rose Hoban
The presentation started as an update to legislators on how North Carolina’s Medicaid reform process will affect people with mental health and substance use problems.
Instead, the discussion during Tuesday’s meeting of the Joint Legislative Oversight Committee on Medicaid and NC Health Choice turned into a hour-long interrogation of Richard Topping, the CEO of Cardinal Innovations, one of the state’s publicly funded mental health managed care organizations.
Legislators, and even the state’s Health and Human Services Secretary Rick Brajer, lit into Topping, criticizing his new million dollar-plus reimbursement package. They also criticized the way Topping has stretched the boundaries of legislative mandates and his agency’s use of public money.
“I received minutes from your board, Sept. 16 of 2016, they made that motion, that your 2017 comp (sic) package, they raised your salary from $400,000 to $635,000, they gave you a 0 to 30 percent bonus potential which could be roughly another $250,000 and also you have some sort of annuity or long-term package of $412,000,” said Sen. Tommy Tucker (R-Waxhaw).
“We’re serving the poor, we’re serving the least of these… how do I as a legislator… or any of us who are getting the calls from a mom or a dad who’s got a disabled child on a five-year waiting list, how do I explain to them this board has given you that kind of compensation package?”
Market rate
Topping has been CEO of the Kannapolis-based Cardinal since April 2015, when former CEO Pam Shipman was pushed out by the agency’s board, which included Topping.
In addition to criticizing Topping’s salary, Rep. Nelson Dollar (R-Cary) and Tucker pressed Topping on some of his agency’s practices, including real estate moves and a decision to sell the $14.7 million, 79,000-square-foot corporate office built by Cardinal in 2010.
“When it was originally set up, it was set up to be a campus, where you could expand,” said Sen. Tommy Tucker, further asking Topping whether he planned to move corporate offices to a space in downtown Charlotte worth more than $300 per square foot in rent. “If you need more space, you’ve got a building in Concord that’s sitting empty.”
Image courtesy PBH
During his exchanges with the committee Tuesday, Topping defended his board’s salary decision by noting that Cardinal had saved the state money year-over-year, even as it absorbed five other agencies in less than a decade.
“We do not have six CEOs, six management teams, or six workforces,” he responded, noting the organization’s salaries are at 50 percent of the market. “So, even at market-based pay, it still costs less than to have six workforces at government pay.”
Topping argued that allowing Cardinal to pay “market rate” was the same thing the General Assembly did when it waived state employee salary limitations for the new DHHS Division of Health Benefits, created to manage the state’s new Medicaid system.
“I think the highest paid person within [the Division of Health Benefits], in terms of total compensation, is less than $300,000,” responded Brajer. “Certainly, of my direct reports, it’s generally lower than that.”
The funds supporting Cardinal are taxpayer money, emphasized Mark Botts, an attorney from the UNC Chapel Hill School of Government who is an expert in the legal aspects of North Carolina’s mental health system.
“The vast majority of revenue is either county, state, or federal money,” Botts wrote in an email. “Once revenue is received by an LME-MCO, it is public money subject to the fiscal control and budgeting laws applicable to other local governments like cities and counties.
“This does not necessarily answer the question whether the Cardinal board can approve a salary the size of the one it has approved for its CEO.”
Botts referenced a statute which orders that any unusually high salary should be supported by “documentation of comparable salaries in comparable operations within the region.”
NC Health News requested the CEO salary figures from all seven of the state’s LME/MCOs and heard from two: Trillium, based in the eastern part of the state, and Alliance, which covers people in and around Wake County. Both those organizations’ CEOs, Leza Wainwright and Robert Robinson, make less than $200,000, which is about half of Topping’s reported original salary.
Wainwright said the other LME/MCO chiefs around the state, except for Topping, make about the same.
Nothing unique
Topping’s responses did little to quell the palpable frustration in the room among legislators.
But the sharpest comments of the afternoon came from Brajer, whose anger became increasingly evident as he addressed Topping.
“Everything that Cardinal Innovations does today, they do today is exactly what every other LME/ MCO in the state does, in terms of provision of services,” he said. “There’s nothing unique or different.”
Brajer emphasized the organization has been given an exclusive monopoly by the General Assembly to perform its work.
“[LME/MCO’s] role is to do exactly what the legislature, what the governor wants them to do… until they convince the Legislature that they want to do more.”
Brajer said that Topping is erroneous to compare himself and his staff’s salaries to those of hospitals or other parts of the healthcare market. He also noted other LME/MCOs are doing innovative and interesting projects, often moreso than Cardinal, while paying their leadership less.
“If you think about the population we serve, the most vulnerable… if they’re uninsured and literally they have nothing, or if they have Medicaid services, or whether they’re on a waiting list, whether they have a desire to have more services, we know there is so much more we can do with our LME/ MCOs,” he said, “I think it’s unconscionable to have a total compensation package of $1.2 million for an LME/MCO.”
Brajer asked legislators “for more support statutorily to make sure LME/MCOs do the work that they’re supposed to do and do it in a financially responsible way.”
The Senate had proposed a bill during this year’s legislative session that would have put some more controls on LME/MCOs. But that bill died in the final days of the session.
“We may do something about the LME/MCOs, but there’s only one that acts out of range,” said Tucker after the meeting, noting that Cardinal has “done everything within the law.”
But Tucker reiterated his frustration with Topping’s compensation.
“It’s awful to have to have someone walk up to you at church or at a school football game or grocery store and show you their child that’s disabled, that needs services that private insurance won’t pay for any more and I can’t help them,” he said throwing up his hands.
“But then I’ve got to tell them, we’ve got a guy over here who serves you that’s got you on a five year waiting list and he’s making a million bucks.”
[box style=”0″]Cardinal has long been a different kind of animal in North Carolina’s mental health ecosystem.
Originally known as Piedmont Behavioral Health, the organization was one of North Carolina’s mental health “local management entities” (LMEs) created during the mental health reform instituted in the early 2000’s.
By 2002, former Piedmont CEO Dan Coughlin had convinced legislators to allow his organization to run a pilot program for delivering mental health services for the Medicaid and uninsured patients in his five-county region using a model that’s more familiar to for-profit insurance. Coughlin’s newly created managed care organization used a waiver from federal authorities to get one lump sum of money from the state and use it as they deemed fit, so long as they delivered services.
By 2008, the organization was saving the state money, but mental health providers were starting to chafe under the restrictions created by the agency while many patients complained about denied services.
”In the managed care model, once a consumer is stabilized, you start withdrawing support. You can destabilize the individual,” Disability Rights North Carolina head Vicki Smith told NC Health News in 2012. “That is what is happening with many of our clients.”
Over the years, Smith and her organization often sued Piedmont over denied services and they have frequently won.
Nonetheless, the savings produced by Piedmont was tempting to legislators. In the fall of 2011, HB 916 ordered all of the state’s LMEs to convert to managed care organizations, and “maintain fidelity to the Piedmont Behavioral Health (PBH) demonstration model.”
When the mental health reform process started in the early 2000s, there were 23 LMEs, now there are seven LME/MCOs. By the end of 2017, that number will be down to four.
To read our 2012 series on Cardinal Innovations (Piedmont Behavioral Health), click here.
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You should also be aware that Cardinal Innovations is the only MCO that refuses to reimburse for care provided for the undocumented.
Thank you, NC Health News, for focusing on this. Recently I sent a note to several legislators highlighting several concerns–among them Topping’s statement to the State CFAC that Cardinal would NOT be spending down its accrued savings “because neither DHHS nor the legislature will tell us how we are supposed to spend it.” Any voting taxpayer who expects accountability from the MCOs knew that not only were many of those dollars to be spent, but they should be spent on the needs within the community ACCORDING TO THE INPUT OF COMMUNITY STAKEHOLDERS–INCLUDING CONSUMERS AND FAMILIES!
It was so clear that Mr. Topping did not really care about the outcomes being purchased with public dollars, but rather about the growth of his enterprise commercially.
As one who did sit on the legislative committee aimed at defining MCO governance years ago–my expressed concern at that time was about rules that might allow too many proprietary liberties while disregarding system outcomes. In my humble opinion, and to the consternation of many consumers, families, and other taxpayers in this state–we have witnessed just this.
This is the new AMERICA, a divided country partly caused by injustices such as these disproportionate salaries. Some make excess money while others barely make a livable wage! It’s infuriating & millions of people are enraged for a good reason.
NO ONE should make hundreds of thousands of dollars a year regardless of what their profession is & often times those who make more money work less. Middle & lower classes are been pushed down. Disabled & those suffering from the disease of addiction (a HUGE epidemic in this country) are not been supported as they should & lack of adequate state funded rehabilitation facilities. Funds that could be put towards needed services are given to continue raising salaries of those in high positions who don’t really need more raises.
The MCO system needs to actually be reduced more. Legislation has required that they be uniform. They are not. All have different criteria. Alliance,Smoky,Trillium and Cardinal function well. Others don’t bother to call back or you have to explain to them what to do. They use MD outside of the State to deny care and on more than one occasion have denied suicidal patients. They are overstuffed.
This is absurd, all the while Cardinal is wanting to reduce the hourly pay for the work force that provides the care all these clients deserve. I can only assume Mr.Topping needs another pay increase. No wonder they have such a turn over with staff. I had a feeling in the beginning when Cardinal took over Mecklenburg County we were going to see something like this. I can only pray that our legislative oversight committee will dig deeper and do something about this situation.
Public-private partnership = all of the downsides of government and the private sector with none of their distinct benefits.
– Crippling bureaucracy? Check.
– Profit motive while skimming off the top? Check.
Mr. Topping is ironically living up to his name, ‘topping,’ everyone else’s salary I daresay. This same set of phenomena has happened in many other states in the mental health reorganization efforts. With this half privatization, lessening oversight by the states, the heads of these organizations all build new buildings, and raise their salaries. Look to the histories of such in Michigan and Arizona in the 1990’s for almost exact duplicate examples of this kind or corporate behavior.
As a former direct care worker for 20+ years in this system i know it has only become less and less client centered care but also demands an impossible amount of paperwork to make it LOOK like they are doing a good job. The consumers deal with overworked underpaid clinicians who do not have the literal time and resources to provide the best care, this then creates burnout and turnover that in turn cost money and poor client care. I dont get it, but this is one professional that will not sacrifice my life and well being to line the pockets of cooperate leaders who truly do not care. I have left public mental health and have no intention of returning. It is sad because those clients are ones I have had a passion for serving.
Kristin … my sentiments exactly!! My daughter is a client, receiving services in 2014. I have fought and fought to find staff to service the hours she was assigned. The staffing agency does nearly NOTHING to assist in staffing and only a very few staff my daughter had received is worth the ink on paper. Our turnover has been unbelievable!! I have become the micromanager of her services as the Agency ignores my pleas for help. Yet, 1000’s are on the waiting list!! I’m so frustrated. But my complaints fall on deaf ears. Then I read this??? Holy Cow!! Just after finding out that her 1 good staff will be taking a PAYCUT!!! Grrr … wish I had some answers.
Kristin I totally agree with you. We as clinicians enter the consumers home and wanting to provide the best care possible and our only reward is that we see progress and is able to help the consumer and their families to better their health and well-being. We often become burnout and always feeling that we are the only ones that care. We are underpaid and receives no bonus or rewards. We sometimes feel like the main focus is about money and not the quality of care. I have spent over 25 years in the disability/mental health field because I like helping people, but I am beginning to think and feel like you and that is to give up on sacrificing my life and well being to line the pockets of cooperate leaders that don’t care. While I struggle to make ends meet and I watch the consumer that I work with suffer and have to tell them that I can’t do no more that I am aloud to do with very limited resources or no resources. Some of our consumers are placed in the hospital or life worsen waiting for authorization.
Guess that explains why my son is still on waiting list and has been for over 8 years. Just told that it will more than likely be at least two more years before he will get slot if we are lucky.
Jennifer I have often had to tell families about that waiting list that you mentioned. I feel stupid when it comes out of my mouth telling a parent that they will have to wait for care or services “that there is this list.”
Now we all know why Shipman was forced out so Topping could take the job and double his salary. She was one of the few people left that cared about the consumer. Worked with Piedmont Area Program, then the Lme, now the Mco. Nothing person centered about Cardinal. Sure they’ll show you data on how great they are. It’s all horse $&;t! Like for their UM department to review Toppings salary for medical necessity. Denied!! Salaries are supposed to be competitive. Who is he competing with? Also when you put a lawyer in charge on care for the most vunerable this is what you get. Someone out for himself. Bet he is looking for his next raise already. Cardinal is a different animal because the state lets them do what they want and is scared to death of them. They don’t even share their info. After being a pilot for years they don’t even want to share what they have learned except for programs to are taken over by them.
The legislators also need to look at the staff salaries & year end bonuses given out at Cardinal Innovations. It is very disheartening to keep losing direct care staff because their hours keep getting cut & their salaries keep going down (most are close to minimum wage) while the office administrators at Cardinal keep making more.
Bee … you’re exactly right. Who listens? My daughter, with cardinal since 2014, has had terrible staff abuse her, neglect her or AMAZING staff that make new career choices due to low pay and burnout.
I have called Cardinal for services and was told that they do not provide the services my daughter needs. They referred me to community based workshops for parents with special needs children. I have been on the waiting list for 6 years now.