Medicaid MCOs: And then there were 10

BREAKING: DHHS Terminates Western Highlands Contract

April 6, 2013 by Taylor Sisk
State Medicaid director Carol Steckel informs the managed care organization for eight Western N.C. counties that its contract will not be renewed.

By Taylor Sisk

State Medicaid director Carol Steckel sent a letter yesterday to the Western Highlands Network board of directors informing them that the mental health agency’s contract with the state will be terminated on July 31.

Western Highlands is the managed care organization (MCO) that serves Buncombe, Henderson, Madison, Mitchell, Polk, Rutherford, Transylvania and Yancey counties.

In a bulletin posted on the state Department of Health and Human Services website, Steckel said that the Division of Medical Assistance “will work closely with Western Highlands Network to move management of the waiver operations with the goal of a smooth and successful transition with no interruption in services.”

The MCOs, formerly called local management entities, are the regionally based agencies that receive a set monthly payment from the state to provide both state- and Medicaid-funded mental health, intellectual and developmental disability and substance abuse services around the state. With that money, the MCOs must allot services for everyone under their care.

There are presently 11 MCOs.

Western Highlands began operating as an MCO in January 2012. In July, its board of directors fired CEO Arthur Carder Jr., saying that he had failed to inform them that the agency had fallen $3 million in debt. The agency has been attempting to gain stability since.

Former Western Highlands CEO Arthur Carder Jr. was fired after his board learned the agency was losing half a million dollars a month. Carder is shown here addressing his board earlier this year. Photo credit, Lydia Wilson

In March, Sen. Tommy Tucker (R-Waxhaw), a member of the state Joint Legislative Oversight Committee on Health and Human Services, told North Carolina Health News: “We have two or three [managed care organizations] that are operating very well and would be able to absorb MCOs that are … out there on the outer limits of not being able to operate up to standards. So we’ll move forward with that.”

According to a report released in March by government consultant Mercer, which contracts with the state’s Medicaid agency to review services, vacancies in key positions and issues with its client information system had created a “significant risk” of Western Highlands being unable to operate properly.

“To remain a viable and sustainable managed care organization, WHN will be required to systemically address and resolve each of these challenges within a consolidated timeframe,” the Mercer report read.

Last Wednesday, Gov. Pat McCrory announced his plan to overhaul the state’s Medicaid program. Called “Partnership for a Healthy North Carolina,” the plan would open up Medicaid to competitive bidding by companies and MCOs from inside and outside the state.

At least three organizations, called comprehensive care entities, would win contracts to administer and coordinate the care funded by Medicaid and be paid for the task. They would be required to coordinate both physical and mental health care for their patients.

Once established, those organizations would compete against one another for beneficiaries. Some of them could be for-profit entities.

The state legislature must vote on the plan.

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Posted on April 6, 2013, in Division of Medical Assistance, MCO, Medicaid, Medicaid Contracts, Mental Health, NC DHHS, North Carolina, Taxpayers, Termination of Medicaid Contract and tagged , , , , , . Bookmark the permalink. Leave a comment.

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