The NC Medicaid Mental Health 10-Ring Circus: How 10 Mini-Jurisdictions Will Be the Downfall of Mental Health

Ever been to a three-ring circus? It is hard to stay focused on one ring because so much is happening in all 3 rings.  Are you supposed to watch the lion-tamer? The trapeze artists? Or the motorcycles jumping through rings of fire? You can’t watch all the acts.  You end up turning your head back and forth like a water sprinkler, only to catch some of each act.

Now imagine a 10-ring circus.

You wouldn’t be able to see much of any act.

This is similar to our NC Medicaid mental health system.  Instead of the one single state entity running our mental health system for Medicaid, we have 10 entities.  And all 10 entities have different rules.  Different Medicaid rates.  (Not to mention this is in violation of the federal “single state agency” mandate).

So what is the effect of these 10 mini-jurisdictions with different rules on our Medicaid mental health system?

Providers are going out of business.  Medicaid recipients are not receiving medically necessary, mental health services.

While the dancing bears, the fire-eaters and the acrobats are all performing, the ringmaster loses control.

Yesterday a psychologist-friend (We will call her Dr. Liz) told me that a mother called her asking whether Dr. Liz could see her child.  Dr. Liz soon learned that the mother and the child were on Medicaid.  Dr. Liz agreed to assess the child, but sadly informed the mother that it was highly unlikely that Dr. Liz could provide therapy for the child because the child is on Medicaid.

The mother burst into tears.  She explained that she lives in Fayetteville.  (Dr. Liz provides services in Durham).  One and a half hours away.  The mother said that Dr. Liz was the 30th provider she called.

29 providers either refused to see the child or had waiting lists months and months long because the child is on Medicaid.

The mother explained that the psychologist the child had routinely seen went out of business and that she did not understand why there were no psychologists within an hour and a half drive of her that were willing or able to provide services to her child.

She cried, “Why won’t anyone take Medicaid?”

When Dr. Liz told me this story, I was deeply saddened.  Yet this is reality.

Dr. Liz could not provide services to the child because, despite the fact that Dr. Liz has a Medicaid contract with the Department of Health and Human Services (DHHS) to provide Medicaid services throughout North Carolina, one managed care organization (MCO), Alliance Behavioral Health (Alliance), has decided that Dr. Liz cannot provide services in Durham County (where Dr. Liz is located).

We have 11 MCOs across North Carolina.

MCO map

Although after September 30, 2013, we will have 10 MCOs.  After Sept. 30, Western Highlands will be consolidated with Smoky Mountain, and Smoky Mountain will oversee management of mental health services for 23 western North Carolina counties.

So I will use 10 MCOs in this blog as there will be 10 within a few weeks.  BTW: There is also a lot of talk that MeckLINK will soon be the next MCO to disappear, but we shall see.

So how are these 10 MCO creating mini-jurisdictions? And why are these mini-jurisdictions causing the downfall of NC Medicaid mental health?

Let me explain:

Dr. Liz lives and works in Durham county.  Alliance is the MCO.  Alliance has refused to provide Dr. Liz with a Medicaid contract.  Therefore, Dr. Liz is not allowed to provide Medicaid services in Wake, Durham, Cumberland, or Johnston counties, because Alliance is in charge of those counties.

However, if Dr. Liz drives over to Fuquay Varina (Harnett county), Dr. Liz CAN provide Medicaid services there because Sandhills, the MCO for Harnett county, contracted with Dr. Liz.

Do you see the issue?

In essence, by Alliance not contracting with Dr. Liz, Alliance has taken Dr. Liz’s Medicaid contract with DHHS and torn a chunk out of it.  Dr. Liz’s contract with DHHS states she can provide services statewide.  But Alliance removed Dr. Liz’s ability to provide services in 4 counties, Wake, Cumberland, Durham and Johnston.  Since Dr. Liz could, theoretically, provide services in 96 other counties, Alliance removed a small chunk of Dr. Liz’s contract with DHHS…but still a chunk nonetheless.

If Dr. Liz ONLY provided services within Alliance’s catchment, then Alliance, by refusing to contract with Dr. Liz, would have either (1) put Dr. Liz out of business; (2) caused Dr. Liz to no longer accept Medicaid; or (3) forced Dr. Liz to relocate.

As all 10 MCOs are managing Medicaid differently, one provider could be allowed to provide Medicaid services in half the state, but not the other half.

While, theoretically, on paper, it may seem easy to tell Dr. Liz to just relocate her practice to Fuquay Varina, in reality, this is much more difficult.

Dr. Liz signed a 5-year lease for her building in Durham, and she is only in her first year (she just renewed it) of the lease.  She also has a daughter who attends school nearby her office.  Were Dr. Liz to move her office, she would no longer be able to transport her daughter to school.  Her clients cannot drive to Fuquay.  Most of her Medicaid clients lack transportation or the funds to pay for gas to drive 30 minutes further.  She has no clients in Fuquay.  She has no staff in Fuquay.  Her staff will not follow her to Fuquay; they all live in Durham. 

Dr. Liz does not have monetary ability to go lease another building in Fuquay.  But she is unable to perform her work where she is located now in Durham.

So what happens?

More times than not…the provider’s company goes bankrupt.  Which is why the mother cannot find services for her child in Fayetteville.  Many providers in Fayetteville and across NC have gone belly up.  The few remaining providers are either limiting the number of Medicaid patients they will accept or have long waiting lists.

Not only do the MCOs determine the providers with whom to contract differently, the MCOs even reimburse certain Medicaid services differently.

Assertive Community Treatment Team (ACTT) is a 24-hour service for the severely mentally ill.  All 10 MCOs must provide ACTT services, but the MCOs do not have to reimburse uniformly.

Therefore, if Dr. Liz were to provide ACTT services in the western part of the state, Dr. Liz may receive $295.32 per unit.  But if Dr. Liz provided the services in southern NC, she may have been reimbursed $323.98 per unit.

This Medicaid reimbursement rate changing depending on which MCO is paying would be like a Chatham county DMV charging $25 to renew your license, but a Mecklenburg county DMV charging $75.  It is a North Carolina state license!  The price to renew should be statewide.

Just like Medicaid should be uniform across the state. 

But, instead, here in NC, we have created 10 mini-jurisdictions.

In each of the 10 mini-jurisdictions, the MCO dictate the rules.  In each of the 10 MCOs, the rules are different.  Each MCO can choose to contract with a provider (or not) with zero regard as to the effect on the provider, the provider’s company, and the Medicaid recipients.  The MCOs can reimburse the same Medicaid services at different rates.

The dancing bears, the fire-eater, and the acrobats are all charging different entrance fees, depending on which entrance you entered.  (And we all know that a dancing bear should not be in charge of entrance fees!) 

The ringmaster is sleeping.

There is no uniformity in Medicaid mental health in NC. 

It is a 10-ring circus!

About kemanuel

Medicare and Medicaid Regulatory Compliance Litigator

Posted on September 11, 2013, in "Single State Agency", Alliance, Behavioral health, Denials of Medicaid Services, Division of Medical Assistance, ECBH, Health Care Providers and Services, Jurisdiction, MCO, MeckLINK, Medicaid, Medicaid Contracts, Medicaid Recipients, Medicaid Reimbursements, Medicaid Services, Mental Health, Mental Health Problems, Mental Illness, NC DHHS, North Carolina, Provider Medicaid Contracts, Psychiatrists, Psychologists, Sandhills, Smokey Mountain Center, Tax Dollars, Termination of Medicaid Contract and tagged , , , , , , , , , , , , , , , , , , . Bookmark the permalink. 8 Comments.

  1. Last night I saw a commercial for ‘Renew – NC’ (check it out at In this commercial, there was self back-patting about how ‘fraud and abuse’ in the Medicaid system are being quelled by the current policy makers.

    What is scary about this commercial/self-justification/cognitive dissonance is that the policy makers in Raleigh actually BELIEVE IT. They see all the audits as a way of ‘improving care’ and all of the businesses closing as a way to save money and prevent Medicaid over-expenditures. They have a draconian and almost psychopathic way of rationalizing all the collateral damage they are creating.

    Rhetorically I ask the following – how do you deal with such self deception and disconnection from reality?

  2. Jerry L. Sloan, Ph.D., ABPP

    What you say in your blog is true enough, but is only part of the story about the fallacy of Medicaid treatment in this state. The other part of the problem has to do with who is selected to be a provider of Medicaid services. The MCO’s tend to favor large, multi-faceted organizations that claim to do “community support” as opposed individual practitioners, but what we see for “community support” from these organizations is all too often a constantly-changing cast of B.A.-level psychology or counseling people with little experience who are paid very low wages (which is why they don’t stay long) and are given very little support. These large organizations have figured out that this is where the money is and they concentrate their efforts there and it tends to drain the budget. In addition to that, the “support services” are often laughable: we have instances of clients being taken to hit golf balls, going for rides with their therapists and other equally silly activities, all in the name of therapy, and the MCO’s offer very little oversight for these activities. That is sad because the people being served are some of the most needy, but the goal isn’t service…it is profit. Until we get back to a uniform set of standards across the state for payment and for quality of service, this type of fraud will continue. Oversight cannot be limited to sterile chart reviews, but will require actually going directly to clients to validate and evaluate the services rendered. If that were done across the state on even a small scale, you would see a return to sensible services and a renewal of the basic element of any kind of treatment, which is an interaction based on a relationship between provider and client, negotiated on an individual basis.

  3. Surprised that your detailed review of this situation didn’t say WHY Alliance won’t contract with “Dr. Liz”? Is it a financial dispute? They already have enough providers? A quality issue? Your readers need to know that to access what is going on.

    • Barry,

      Good point. The problem is that if I explained why Alliance will not contract with Dr. Liz, it would be my opinion. I cannot purport to know what is going on inside Alliance. We believe that, in Dr. Liz’s situation, she was placed on prepayment review by DHHS over a year ago. CCME conducted the prepayment review. In court, we proved enough to receive an injunction that CCME’s audit was erroeous. But Alliance is not contracting with Dr. Liz because of the results of the CCME audit, which we contend were erroneous.

  4. I completely agree with Jerry and as a provider of a community based service we have decided to employ Master’s Level staff as much as possible and provide a tremendous amount of supervision. Recently, an RFP denied us a contract favoring all the large or established agencies. We are the only community based provider who are certified in evidence based practices (trauma therapy & adolescent sex offender therapy) and one of few who provide a continuum of care for children ages 3 – 5. We have had no adverse actions ever and truly care about our clients getting better. When I asked about the decisions one of the managers told me that it was not true that only large agencies were given contracts but when the list was posted that is exactly what happened. The sad part is, I have worked with some of the agencies in various capacities and I know that their clinical expertise is not even close to what we provide. So now, we have to make a decision. When we called to ask who to refer our children who have sexually harmful offenses to, they gave us our clinician’s name. When we called to find out which agencies specialize in childhood trauma, every one that we contacted gave us a stern “no”. As therapists how do we ethically transition these children and families?

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