Cardinal Innovations Healthcare’s new board of directors adopted policies that prohibits the board from hosting retreats at high-end venues, bans charter flights and bars the use of agency money to purchase alcohol.
The new board met Saturday and was given control of Cardinal by the state.
The board approved a corrective action plan to address concerns over previous spending, including seeking Office of State Human Resources approval, if Cardinal seeks to pay its CEO more than the range set by OSHR.
Cardinal also intends to hold future board meetings at its offices “or at other appropriate locations in North Carolina, paying specific attention to the cost of the venue and public perception,” according to the corrective action plan adopted.
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“It’s an absolutely great start,” said Mecklenburg County Commissioner George Dunlap, who sat on the former Cardinal board and is also a member of the new leadership.
Cardinal came under fire last year by the state auditor and lawmakers for its spending decisions. That included paying then-CEO Richard Topping a salary that was three times the amount permitted by state law, taking in-state charter flights and having two taxpayer-funded retreats at a total cost of $133,155, including a $2,127 bar tab. Cardinal coordinates care for Medicaid patients with behavioral needs, including alcohol dependency.
In November, the former Cardinal board approved ousting Topping and paying him and other departing executives $3.8 million. The N.C. Department of Health and Human Services said that severance pay was unlawful and fired the Cardinal board and took control of the mental health agency.
Shortly after the state took over Cardinal, DHHS successfully had a temporary restraining order put in place against the former board of directors and Topping, alleging that they had tried to keep control of taxpayer money.
Those former leaders counter-sued in December, arguing the state lacked the authority to take over Cardinal and remove its board.
On Monday, an attorney for the state sought a preliminary injunction, against the former Cardinal board members and Topping, barring them from taking any action as the lawsuits are worked out in court.
Superior Court Judge Nathaniel Poovey said he could decide whether to grant that injunction as soon as Tuesday.
Attorney Rob Wilder, who represents the former board and Topping, opposed the injunction, saying there is no evidence that they have done anything involved with the operations of Cardinal.
State attorney Michael Wood represented DHHS and argued for the injunction.
Referencing the state audit of Cardinal, Wood said former Cardinal leaders were “spending money not on healthcare, not on sick people, but on what seemed to be extravagances of the board.”
The new Cardinal board met over the weekend, and DHHS formally transitioned control of Cardinal to that board. The new board includes three members from the old board, including two Charlotte residents – Dunlap and Carmen Hooker Odom, a former DHHS secretary – and Bryan Thompson, who was elected chairman of the new board.
Cardinal, is a managed care organization, acting as an insurer for N.C. Medicaid patients who need treatment for mental health, substance abuse or disabilities. Cardinal coordinates care for those patients by contracting with providers who treat them. Cardinal is the state’slargest MCO, covering 20 N.C. counties, including Mecklenburg.