In a rare move, Mecklenburg commissioners voted unanimously Tuesday to fight the state over its decision to reassign supervision of the county’s Medicaid money for mental health services to an outside agency.

The board decided to ask an administrative law judge to reverse a decision by former acting N.C. Health and Human Services Secretary Albert Delia to transfer responsibilities for the federal money from the county’s MeckLINK Behavioral Healthcare to Kannapolis-based Cardinal Innovations Health Solutions.

At stake is oversight of $200 million in federal Medicaid money, $20 million in county money and $15.3 million in state money. More than 150,000 Medicaid recipients in Mecklenburg rely on the money for mental health, substance abuse and developmental disability services. The county has hired 143 staffers – added to 73 already working – to implement the programs.

The vote came after consumers, providers, advocates and county staff told commissioners that reassigning the money to Cardinal would diminish local control and reduce the quality of services.

Doug Sea, an attorney who handles Medicaid cases for Legal Services of Southern Piedmont, said that consumers and providers in Mecklenburg are concerned about dealing with Cardinal, formerly called Piedmont Behavioral Healthcare (PBH).

“The providers are so upset that many are refusing to contract with PBH,” Sea said. “We will not have a provider network in this county if PBH takes over.”

Charlotte lawyer Dan Bishop, hired by the county to determine if it had any legal remedies, told the board that Delia overstepped his authority.

“Once you dig into the facts, which we have, it becomes quite compelling that the decision made no sense at all,” said Bishop, a former commissioner. “It was clear that DHHS changed its interpretation of the law. … They have made a determination that otherwise doesn’t make common sense.”

Urgency expected in matter

Bishop said he felt Delia was pressured by a state oversight committee to save money by accelerating the start time, which led to his decision.

Delia acknowledged to MeckLINK that its startup would be quicker than Cardinal’s. Yet he said that the law gave him no other choice than to reassign the program to Cardinal because a state-hired consultant concluded MeckLINK couldn’t get the program running by Feb. 1.

Bishop said that the matter should be filed with the N.C. Office of Administrative Hearings within a week. He expected it to be received with some urgency.

He said the issue could be resolved even before it goes before a judge. “I think someone (at DHHS) will take a look at things quickly. I don’t think they gave it a careful enough look,” Bishop said.

Commissioners also directed county staff to continue preparing to run the Medicaid program in time for a Feb. 1 deadline. That includes hiring consultants to assure that deficiencies found by the state consultant last month in MeckLINK are corrected.

MeckLINK chief Phil Endress told commissioners that 43 percent of those deficiencies found during a Dec. 20 review are complete. “We still have three more weeks,” Endress said.

He said he’s certain the program can be fully running by Feb. 1.

‘Law was not followed’

The board met privately for nearly two hours to hear Bishop’s case before taking a public vote. It came a day after County Manager Harry Jones said he did not believe the state’s decision to redirect the Medicaid money complied with state law.

Delia and new DHHS Secretary Aldona Wos said state law required that Delia decide by Jan. 1 if MeckLINK was ready to start the program by soft launch date on Feb. 1.

But in a memo to county officials, Bishop cited multiple concerns with Delia’s decision. Among them, he said a state statute did not set a Feb. 1 “go live” date.

Further, Bishop wrote that even if Delia had acted properly in refusing to certify MeckLINK’s readiness, “he exceeded his statutory authority in immediately reassigning MeckLINK’s Medicaid waiver implementation responsibilities.” He said the law allows for a local management entity (LME) that has not been approved to merge or enter into an “interlocal” agreement with another management group that is approved.

Bishop wrote that only if an LME entity such as Mecklenburg County fails to comply with that requirement is reassignment allowed. “Secretary Delia skipped the interim step,” Bishop said.

Many commissioners said they didn’t come to the meeting expecting to contest Delia’s ruling, which was upheld Monday by Wos.

Commissioner Trevor Fuller was one.

“I thought the secretary made his decision and that was the end of the story,” said Fuller, a Charlotte lawyer. “But the presentation (by Bishop) changed my mind. I am utterly confident that the law was not followed.

“It is something we need to do.”

Goal to combine oversight

The conversion of MeckLINK to a managed care organization is an effort by the state to create 11 quasi-governmental entities – many like Cardinal representing multiple counties – to oversee mental health, substance abuse and developmental disability services.

The goal is to combine oversight of Medicaid and state money at the community level to reduce costs by keeping people out of institutions and to be more accountable and consistent with services.

The official launch date for the Medicaid waiver program is July 1. Endress told the Observer last week that his agency would be ready by Feb. 1.

But the state’s consultant, Mercer Government Human Services, concluded that MeckLINK had too many unmet requirements to overcome.

Mercer did conclude that MeckLINK could be ready by April 1 – or three months ahead of the official launch.

Yet Delia on his last day in office on Dec. 31 gave the program to Cardinal, a managed care organization that oversees Medicaid programs in 15 N.C. counties.

Cardinal CEO Pam Shipman said recently that the company did not know in advance of the decision that MeckLink wouldn’t be allowed to go forward, but said they were not surprised. For example, she cited an October report from Mercer that “documented serious deficiencies.”

In an email to commissioners Chairwoman Pat Cotham, Shipman said Cardinal has worked with other local management entities to help them prepare for the waiver.

But, Shipman said, the company has “long promised the General Assembly and the Department that we would be a backup for any LMEs that cannot go live, or that go live and fail to be successful. It is more important for the waiver to be expanded successfully than it is for any single LME to be successful.”

In her letter to Cotham, Shipman appeared to try to alleviate some concerns from critics. Shipman, who said she coordinated Cardinal’s development of the Medicaid waiver pilot that began in 2005, said she believes the model allows the company to “customize the waiver to local communities.”

“We will not impose a cooker cutter model,” she wrote. “We work very hard to ensure that the needs of all the people we serve are met.”