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By Rose Hoban
After months of work, a bill that would have reined in executive spending by the leaders of North Carolina’s mental health managed care organizations seemed ready for final passage this week – until it was rewritten into a form that would upend the state’s mental health system.
HB 403 was intended to put restrictions on extravagant expenditures by administrators at the state-funded organizations, known as LME-MCOs. The measure was in part a response to revelations in a report from State Auditor Beth Wood about leadership at Cardinal Innovations, the LME-MCO that manages the care for mental health patients in 20 counties in the center of the state.
That report detailed booze-soaked Christmas parties, first class air travel, monthly detailing on the CEO Richard Topping’s car and a $630,000 base salary for Topping that, with bonuses, could surpass a million dollars a year.
The original bill was crafted with the assistance of members from both chambers, passed the House in April, and went to the Senate, where it sat until Tuesday.
“I got an inkling late Tuesday that there was something,” said Leza Wainwright, the CEO of Trillium Health Resources, the LME-MCO responsible for mental health services in 24 eastern counties. “I didn’t see the [bill language] until about 10 p.m. Tuesday night and I was flabbergasted.”
The substitute bill, presented by Spruce Pine Republican Ralph Hise, would keep a few of the restrictions that could clip the wings of Cardinal’s CEO. In exchange, the bill eliminates all of North Carolina’s LME-MCOs once Medicaid reform starts to roll out, slated to happen in about two years.
“It has, in my opinion, watered down the directness of the original 403,” said Sen. Tommy Tucker (R-Waxhaw), who has been sharply critical of Cardinal both publicly and in one-on-one conversations. “It’s almost like get out of jail free card for Cardinal and I don’t want that to happen.”
“The extravagance and spending, while they may not have been illegal, they certainly were in my opinion, morally corrupt,” he said.
During the committee meeting, Hise – who led the effort to rewrite the bill – hearkened back to arguments from 2014 and 2015 about the nature of the Medicaid overhaul process that was being debated at the time.
Back then, the Senate made it clear they wanted the reworked Medicaid program to spell the end of the LME-MCOs. In its place, senators preferred commercial managed care companies running Medicaid, with those companies overseeing both physical and mental health care in an integrated system.
Instead, what was hashed out was a hybrid plan, where commercial managed care companies will bid on regional and statewide contracts for physical health only, while the LME-MCO system runs in parallel for at least four years after the new regimen goes live.
“The entire solution to this system is to expedite that process of integration and make it effective as soon as… those managed care and regional plans come into effect and allow those entities with experience to take over the mental health system,” Hise said.
According to Medicaid chief Dave Richard, federal regulators will likely greenlight North Carolina’s request to change Medicaid’s form sometime early next year. The new system goes into effect 18 months from that time, likely mid-2019.
And that’s when Hise would sunset the LME-MCOs.
But it’s not that simple, said Trillium’s Wainwright. For one thing, LME-MCOs don’t only provide behavioral health services to people on Medicaid, but also provide care for people lacking insurance altogether.
That care is financed by state dollars. Wainwright described how Trillium has used so-called single stream funding for uninsured patients to create an early childhood home visiting program in the agency’s 24 counties, for example.
“That’s serving a very underserved population, with the goal of intervening upstream, before matters get worse,” she said.[sponsor]
Trillium has also created after school programs and summer camps for kids with autism and kids who have other intellectual and developmental disabilities. And the agency has installed satellite mental health screening kiosks in all 24 counties that include a direct telephone line to providers.
“The huge unanswered question is what happens to the funding for the uninsured,” Wainwright said. “My understanding from talking to people across the country is that managed care plans have not been willing to pick up and administer that funding because it does not come with administrative dollars.”
In both Louisiana and New Mexico, state officials made the assumption that the commercial plans would be willing to administer state dollars, but they were not, according to Wainwright.
She also worried about what happens to crisis services under managed care. That kind of care is hard to fund and state dollars provide the backstop.
“Who is responsible for making sure that service remains available?” she asked. “Because just the regular fee-for-service payment or the per member per month payment is not going to keep that in place.”
Despite the stated objections of Tucker and of Sen. Jeff Tarte (R-Cornelius), the bill received committee approval and now will go to the Senate floor where it’s expected to pass. Then, it goes to a conference committee to be hashed out behind closed doors.
Several ranking members of the House have been clear that the bill, as it stands at present, is not acceptable. But they’ve also said they know this is part of the horse-trading between the Senate and the House over this year’s budget.
Part of Rep. Nelson Dollar’s (R-Cary) objection to the reworked bill is that it would destabilize the mental health system by making moves too quickly.
“The last time there was a sudden shift in how we operate in North Carolina’s behavioral health system, it took us the better part of a decade to recover from that,” he said, referring to the reform effort of the early 00’s.
That point was reiterated by Ann Akland, head of the Wake County chapter of the National Alliance for Mental Illness, who wrote an email to all of the members of the Senate on Thursday afternoon.
“It has taken over 15 years for the state mental health system to stabilize from all of the disruption of closing state hospital beds and privatizing the system,” Akland wrote. “At last, there is a good, solid network of mental health providers delivering services and a management network of LME/MCOs that is ensuring quality and access to care.”
She asked that legislators not disrupt the system again.
Dollar reminded that the current LME-MCO system was piloted for five years at one site, legislators made tweaks to that system, and have tuned it continually since it’s launch in 2013.
“There’s no sort of silver bullet, some group out there that’s just going to turn over very complex populations and large amounts of money in a complex system and suddenly, they’re going to answer all your questions, solve all your problems,” Dollar said.
“This is not a system that lends itself to simple solutions,” he said.