shows a video conferencing call with six people who were talking about Cardinal Innovations
Cabarrus County commissioners during their October, 2020 meeting where they voted to disengage from having Cardinal Innovations provide behavioral health services to their resident. Clockwise from top left: Commission chair Steve Morris, Diane Honeycutt, Blake Kiger, County Human Services director Karen Calhoun, Elizabeth Poole, Lynn Shue. Screenshot courtesy: Cabarrus County Television

By Rose Hoban

With little debate, members of the Union County board of commissioners voted unanimously Monday afternoon to disengage the county from their relationship with Cardinal Innovations, which has managed mental health services there for years.

Several hours later, Cabarrus County commissioners followed suit, initiating the process of severing ties with the organization, which once built a multimillion dollar corporate headquarters there.

In front of PBH's Kannapolis office.
In front of Cardinal Innovation’s Kannapolis office, which was the corporate headquarters until they were moved to Charlotte. Photo credit: Lydia Wilson for NCHN

The moves come after commissioners in both counties received repeated complaints, particularly about children in need of services who were difficult to place because of the complexity of their care.

According to Union County deputy manager Michelle Lancaster, who also manages county human services, people have been frustrated that Cardinal has dragged its feet on getting the appropriate level of care for kids in foster care, some kids with Medicaid, and other children with extensive needs.

“And we have providers of services in the community who have expressed frustration, about the difficulty of working with Cardinal around approvals and feeling like the array of services was appropriate for the clientele,” she said.

Cabarrus County commissioner Blake Kiger said that he’s been hearing complaints about Cardinal almost since taking his seat in 2017.

“I’m sure it predates me. That, at least, is the reference point that I have for how long … we’ve tried to work through some of the issues,” Kiger said. “This is not something that we just have decided to do on a lark or a whim, to a lot of people, this is long overdue.”

The changes come even as state Department of Health and Human Services deadlines are looming for behavioral health providers to apply for contracts to serve people with the most complex needs. Once those “tailored plans” are put into place, it will be a more complicated process for counties to change their behavioral health managers.

Rocky past, present

Cardinal, and its predecessor organization Piedmont Behavioral Health, has managed mental health services in both Union and Cabarrus counties for at least 20 years. The two were part of the five involved in the original PBH pilot program that got counties out of the business of providing mental health services directly to patients. Instead, the state allowed these organizations to pivot and act as mini-insurance companies, contracting with counselors, psychologists, psychiatrists and other providers to deliver care to people with behavioral health issues.

That pilot program eventually spurred North Carolina to completely transform the state’s mental health system to have all care managed by similar “local management entities/ managed care organizations,” a change that went into effect in 2013. Under this managed care system, the agencies, known as LME/MCOs, get a pot of money for every Medicaid mental health consumer in their area to pay for all mental health services a person might need. In addition, the LME/MCOs receive state dollars to cover costs for some people who have no insurance.

The organizations have the power to approve or deny the claims providers submit on consumers’ behalf.

The changes were controversial and turned the lives of some patients upside down as the whole way of receiving care changed. The changes also were rough on providers who saw their revenues shift and had to reorganize themselves as well.

As the changes took effect, some LME/MCOs went out of business, at least one ran its finances millions in debt. All the while, Cardinal grew and grew, taking over the management for patients in more counties, growing from the original five-county system in the southern Piedmont to covering more than 20 counties in far-flung parts of the state.

Throughout its history, Cardinal had often gone its own way. Leaders at the organization seemed impervious to criticism about agency spending and about the way they presented themselves and their agency. They long insisted that Cardinal did not need to adhere to state rules, but that as a “quasi-governmental agency” it was free from legislative oversight.

That facade began to crumble in 2016 when then-secretary of DHHS Rick Brajer publicly took former Cardinal CEO Richard Topping to task for his million-dollar-plus compensation package.

headshot of Cardinal CEO Richard Topping.
Cardinal CEO Richard Topping was finally pushed out of his position by state officials after a headline-grabbing audit revealed a million-dollar-plus salary, lavish parties and travel on chartered jets at state expense. Image courtesy Cardinal Innovations

Then came a headline-generating report from the state auditor in 2017 that found senior management at the agency were paying themselves handsomely, throwing lavish parties on the public dime and flying board members to resorts for meetings in private jets. Topping’s compensation package was well north of a million dollars a year.

Later that year, a new DHHS secretary, Mandy Cohen, took over the agency, expelling the CEO and the board of directors and installing new upper-level managers. Cohen said Cardinal’s consistent flouting of state rules, Topping’s and the board’s defiance of her agency’s attempts to rein them in, and the added tussle over Topping’s salaries finally pushed her to act.

With a new CEO hand-picked by DHHS leaders and a new board, Cardinal seemed to enter a quieter period, during which it expanded but stayed out of the limelight.

But troubles persisted.

“For years and years and years, these same issues just keep coming up,” said Cabarrus County commissioner Lynn Shue. “Even after all the changes that the Department of Health and Human Services made with the appointment of a new board and all of that, it seems as though we’re not getting things that we’re looking for.

“We’re looking for collaborative effort.”

Cardinal losing its grip

On Monday evening, Cardinal’s management expressed their disappointment.

“We have been committed partners in Union and Cabarrus counties for decades,” wrote Cardinal CEO Trey Sutton in an email to NC Health News. “We have been working hard at these relationships and feel that our joint efforts have been headed in the right direction, so today’s activities were especially disappointing.”

Sutton argued Cardinal has been working to “do the right thing for our most vulnerable citizens.”

He pointed out that under state law, the final decision over whether to allow counties to disengage from Cardinal as their mental health manager will have to come from DHHS leadership. He also noted that the multi-month process is “lengthy and certainly not guaranteed.”

Both Union and Cabarrus counties have resolved to move their county contracts to Partners Health Management, an LME/MCO based in Gaston County which covers nearly a million people in Burke, Catawba, Cleveland, Gaston, Iredell, Lincoln, Rutherford, Surry and Yadkin counties.

shows people sitting at long meeting tables, with hands raised
In 2017, commissioners from 19 counties met to choose new board members for Charlotte-based Cardinal Innovations. Photo credit: Rose Hoban

An official in Forsyth County said she’s putting finishing touches on a letter outlining her commissioners’ issues with the organization. She said her commissioners weren’t quite ready to jump ship, but they were open to exploration.

“Local citizens wish for more locally based leadership that is responsive to community stakeholders, especially consumers and families, but instead sense internal chaos and frequent staff changes,” said Winston-Salem-based mental health advocate Laurie Coker.

Rutherford County actually switched to Partners last year. In a presentation to that county’s board of commissioners earlier this month, a representative of the organization outlined the increased level of service.

“The Partners presentation of their first year serving the citizens of Rutherford County was impressive,” county commission chair Bryan King told the Daily Courier. “The news of an increase in providers, and an increase in citizens served was welcomed news.”

Changes coming for complex patients

One of the long-held complaints about the LME/MCO system has been that it disincentivizes spending big dollars on people who have some of the most complex needs. For Union County’s Michelle Lancaster, the big issue was treatment and placement for children with exceptional needs.

“They’re typically hard-to-place kids. They may have,” Lancaster paused and sighed, “It is what it is – over-sexualized behaviors, they may have a history of violence, things that wouldn’t make a traditional foster home appropriate for their care.”

She said her county has ended up spending local dollars to provide the appropriate level of care for these children, sometimes for months or years because the county couldn’t get satisfaction from Cardinal.

“They really see their job as providing treatment and the role of DSS is to provide placement,” Lancaster said. “However, these are complicated kids, you cannot separate the two of those things. You can’t say, ‘Hey DSS, go place that kid somewhere, and we’ll come and catch up with you on the treatment side.’ It just doesn’t work that way.”

These children are among the complex patients whose care will be addressed in upcoming changes to the state’s Medicaid program. In the coming month, DHHS will ask provider agencies to put in their proposals for how to create tailored plans for the most complicated patients.

It’s expected that LME/MCOs will put in applications for contracts that will last for four years. Once counties start down the road with whoever gets chosen to administer these tailored plans, it will be difficult to disentangle themselves, said Corye Dunn, an attorney with Disability Rights North Carolina.

“It’s the rollout of tailored plans that really put the decision point right in front of counties right now,” she said.

The request for applications will open up in November, with contracts awarded sometime early next year.

“And at that point, managed care entities are going to get a multi-year contract to serve a fixed catchment area,” she said. “I can imagine that if I were a county official, and I were unhappy, I’d be pushing for change now.”

Correction: All local management entities/ managed care organizations, transferred to the new system in 2013, not 2015. 

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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...

3 replies on “Union, Cabarrus, other counties look to cut ties with Cardinal”

  1. Thank you for this article. As a now-retired psychiatrist with extensive experience in the NC public mental health system, I am heartened by the increased scrutiny of the LME/MCO system by various counties. It appears that Rutherford County’s switch to Partners has increased the number of patients served and improved patient access by adding more providers to its panel. This is a good thing. However, the number served is not equivalent to quality of care. The behavioral health systems across the country are behind the physical health systems in quality measurement. Rutherford County would be well advised to begin a conversation with Partners about quality metrics that measure clinical outcomes of patients’ treatment. This should be the next step for Rutherford County now that it “has a place at the table” and be a a topic of discussion in the current negotiations the counties mentioned in this article are having with their LME/MCO partners.

  2. Mental health care is so important. Now more than ever. If your low income or no-income “while awaiting SSDI process”,you understand. Having Mental health disorders and having to beg for help is unacceptable. State funded facilities will get you in fast for an assessment. Assessment is just a counselor typing your information. By this point many people need to talk !Actually seeing and speaking with a psychiatrist will be 3-6 month’s longer. That’s terrible! That wait sometimes can make or break a person. Meanwhile your relationship’s with spouse,children,etc suffer!Being told just hold it in for few more month’s till you can speak to psychiatrist, not healthy. Then again we’re nowhere near healthy. NC State funded programs are poorly ran. When is someone going to step-up and help NC mentally disabled people?

    1. This is been a longstanding challenge in NC – funding for mental health. We’ve written dozens, if not hundreds, of stories about it over the years. I hope you take some time to explore our coverage!

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