Last spring Cardinal Innovations Healthcare Solutions took control of more than $200 million in Medicaid spending for Mecklenburg County residents with mental illnesses, addictions, autism and similar issues.
It was a controversial mandate from the state. County officials wanted to keep local control. Clients and their families feared the focus on cost control would erode care.
A year later, many Mecklenburg officials, mental health professionals and advocates say the managed care group, which already had roots in the region, is winning their confidence.
“Oddly enough, I think things are going well,” said county commissioner George Dunlap, who fought the takeover but later became a member of Cardinal’s board.
Rough spots remain, including disputes over paying for some of the most complex and expensive cases. Managed care demands a document-heavy, data-driven approach, and some clients have conditions that make progress tough to measure.
They’re people such as 12-year-old Bewlay Koury of Matthews, who has profound autism. Medicaid pays more than $73,000 a year for support that lets Bewlay, who needs constant supervision and help with everyday tasks, live at home.
Her parents, Christy and Ken Koury, went into mediation with Cardinal after wrangling over the hours and type of service she needs (see accompanying story). They reached a compromise, but Christy still worries about her daughter’s future.
“The issue is that the legislature has cut all this funding, and they’ve brought Cardinal in to be the bad guy,” she said. “It’s an impossible task.”
But several professionals and advocates say Cardinal is serious about enforcing high standards and working through startup bumps.
When there are concerns, “all we have to do is pick up the phone and (Cardinal) people will come to our support groups. That has been well-received,” said Ellis Fields, executive director of the Mental Health Association of Central Carolinas, an advocacy group for people with mental illness.
Cardinal, which is charged with providing care while keeping costs under control, says it has saved enough to extend services to almost 900 people in Mecklenburg so far this year. The not-for-profit organization is monitored by the N.C. Department of Health and Human Services, which regulates how much can be spent on administration and how savings can be used.
In the past year, Cardinal staffers have met with clients, advocacy groups and representatives of schools, courts, law enforcement and other agencies, trying to get a handle on local needs and issues.
Nicole McKinney, Cardinal’s vice president in charge of Mecklenburg, says the “high-touch” approach is paying off as local residents realize the agency will listen to and work with them.
Money is limited
Like so many changes in health care, the Cardinal takeover stemmed from concerns about spending.
Lawmakers grappled with an ever-growing Medicaid system that repeatedly overspent the budget. The Kannapolis-based Cardinal (previously known as Piedmont Behavioral Healthcare) proposed a managed care pilot program that took over Medicaid for five counties north and east of Charlotte in 2005.
The General Assembly voted in 2011 to expand the model statewide. Mecklenburg County officials tried to adapt MeckLINK, a county agency, to the new model. But state health officials weren’t satisfied and eventually insisted that Cardinal, which had grown to cover 15 counties, add Mecklenburg to its territory.
Despite emotional public hearings and threats of a legal battle, the handoff took place April 1, 2014.
“There was a lot of fear of what was going to happen. We didn’t know if the world was going to stop on April 1,” said Heather Johnson, a lawyer with the nonprofit Council for Children’s Rights who represents young people with behavioral health issues.
It didn’t – but many who work with Cardinal say there were bumps and snarls as the new group took over.
Who pays the bill?
Among the challenges: finding appropriate placement for teens who are in custody of Mecklenburg County’s Department of Social Services because they’ve been victims of abuse and who need intensive, constant care because of violent or self-destructive behavior.
Charles Bradley, director of Youth and Family Services for Mecklenburg County, says local facilities that can handle such needs are often full. For teens who have landed in psychiatric emergency rooms or juvenile detention, that means their only options for discharge are going back to parents who are unable to care for them or being placed in foster families that aren’t trained for such intense needs, he said.
In October 2014, the county signed a contract with New Hope treatment center in Rock Hill, which provides intensive therapy and constant monitoring at a daily rate of $429 per resident.
Because New Hope isn’t in Cardinal’s network, Medicaid doesn’t pay. And because it’s across the state line, North Carolina money isn’t available, leaving Mecklenburg County with the bill, Bradley said. The 20 youths who have been placed so far have run up about $200,000 in charges.
County and Cardinal staff have been trying to resolve the issue, both organizations say. If Cardinal doesn’t agree to pick up the costs, the county expects to spend another additional $500,000 in the 2015-16 budget.
County Manager Dena Diorio, who was a skeptic about the Cardinal takeover, said in most cases the transition has gone well. But in this situation, “Cardinal’s going to go with the lowest level of services they can get away with,” Diorio said Wednesday.
Cardinal Chief Operating Officer Will Woodell said Thursday that it’s the county’s responsibility to provide “safe placement for these children until the best-practice, long-term treatment for the child can be determined.” The teens at New Hope haven’t had the assessment for their long-term needs, he said. Only after that is done will Medicaid pay for “medically necessary treatment services.”
Woodell and Diorio both say they’ll continue working together on long-term solutions to keep teens and adults out of jails, emergency rooms and life on the streets. This fall, Cardinal and Monarch, a Stanly County nonprofit that provides behavioral health services, will open a Charlotte crisis center for children and youth.
Worth the hassle?
The new approach to doling out Medicaid money comes with tougher scrutiny of social workers, psychologists, counselors and other care providers.
Some have opted out or been dropped. When Cardinal took over, MeckLINK passed along a list of 557 authorized providers. But Cardinal officials say they were unable to reach many of them, and it was unclear whether they were active with MeckLINK.
Cardinal declined to offer contracts to 18 of the MeckLINK providers. After the handoff, eight more providers chose to drop their contracts and two were involuntarily terminated, according to Cardinal numbers.
“They kind of cleaned house when they first came in,” said Johnson, the Council for Children’s Rights lawyer. The auditing that thinned the ranks is likely to be a good thing in the long run, she said, but it left the county with service gaps Cardinal is still trying to fill.
Cardinal’s McKinney disagrees: “We can comfortably say that we have the necessary services.”
Kristin Rogentine-Lee, a Charlotte psychologist who does testing and therapy for children, is one of those who opted out. She said Cardinal reviewed paperwork from 10 sessions and demanded that she repay $700. The errors they cited were minor, she said, such as failing to note a patient’s progress toward goals on one form. For children with deeply troubled lives, each session doesn’t necessarily bring measurable gains.
“It’s quantifying something that’s nonquantifiable,” Rogentine-Lee said. “I can see accountability and oversight, but nitpicking over these little things?”
When she appealed, Cardinal reduced her penalty to $350, Rogentine-Lee said. But Medicaid payments are already low, she added, and in January she asked to be dropped from Cardinal’s roster.
Sally Cameron, executive director of the N.C. Psychological Association, said the demands of managed care are causing Medicaid patients to lose the services of “very seasoned, valuable practitioners.”
“That’s not a Cardinal/Mecklenburg thing,” she added. “That’s an across-the-state problem.”
Dammeon Chisholm, who spent seven years as chairman of the Mecklenburg County Providers Council before handing off leadership this year, says he was worried about the transition. But he says Cardinal has worked with providers to resolve problems and help them understand the new requirements.
Chisholm is executive director of Charlotte’s Total Care and Concern, which provides services for people with intellectual and developmental disabilities. Like Cameron, he said the increased demands aren’t exclusive to Cardinal.
“It’s just something that’s part of the business,” he said. “There’s a lot of money at stake.”
At a glance
▪ What’s the issue? In April 2014, the state forced Mecklenburg County to hand off control of Medicaid spending for behavioral health to Cardinal Innovations. Some county officials and families worried that care would suffer.
▪ What’s behavioral health? Treatment and support for people with mental illness, substance abuse problems (such as alcohol and drug addiction) and intellectual and developmental disabilities (such as autism, mental retardation and cerebral palsy).
▪ What’s Cardinal Innovations? A managed care organization that got its start providing behavioral health services in Cabarrus, Stanly and Union counties in 1974. Previously known as Piedmont Behavioral Healthcare, it pioneered North Carolina’s managed care approach for this kind of service.
▪ What’s managed care? Cardinal and its counterparts across North Carolina act like insurance companies, contracting with psychologists, counselors, clinics and other professionals to provide Medicaid services. If such groups bring down costs, the savings can be used to expand services.
▪ What’s at stake? Cardinal serves almost 22,700 people in Mecklenburg County. In the full 16-county territory it serves about 72,500, with a budget of $635 million for the current year.
Checking on Cardinal
The N.C. Department of Health and Human Services monitors Cardinal Innovations and eight other managed care groups that handle Medicaid behavioral health. Here are some of the findings.
About 90 percent of adult clients who responded to a 2014 consumer perception survey gave Cardinal positive scores for access, quality of care and general satisfaction, while 72 percent gave positive ratings for such outcomes as improvement of symptoms and better quality of life. Those numbers are similar to state averages.
Spending and saving
In the year that ended June 30, Cardinal took in $427 million and spent $422 million, according to its latest financial statement. The spending included almost $56 million for Cardinal operations and administration, or about 13 percent of the total budget. The percentage for administration, which is part of the contract with the state, is within the nationally acceptable range, according to the National Alliance on Mental Illness.
The state requires monthly reports on several measures of customer service. On the most recent report, Cardinal answered 98 percent of calls within 30 seconds, with an average response time of 5 seconds. Sixty complaints were filed, most by clients complaining about their providers, and all were resolved within 30 days. All claims were processed within 30 days, with an average payment time of 8.6 days. Cardinal met all standards.
An auditor reviewed 14,593 Cardinal claims for payment handled from March to August 2014 and found 99.9 percent were accurate and processed within 30 days. Sixteen were flagged for overpayments ranging from $83 to $3,118.
Every three years, the state hires a contractor to do a full quality review. The latest, covering 2011 to 2014, is scheduled for release later this spring.