NC State Auditor Finds Cardinal Expenditures Unreasonable!!(Finally) #Wastedtaxdollars

The NC State Auditor Beth Wood released an audit report on Cardinal Innovations yesterday, May 17, 2017. Here are the key findings. For the full report click here.


Cardinal is a Local Management Entity/Managed Care Organization (LME/MCO) created by North Carolina General Statute 122C. Cardinal is responsible for managing, coordinating, facilitating and monitoring the provision of mental health, developmental disabilities, and substance abuse services in 20 counties across North Carolina. Cardinal is the largest of the state’s seven LME/MCOs, serving more than 850,000 members. Cardinal has contracted with DHHS to operate the managed behavioral healthcare services under the Medicaid waiver through a network of licensed practitioners and provider agencies.


• Cardinal spent money exploring strategic opportunities outside of its core mission

• $1.2 million in CEO salaries paid without proper authorization

• Cardinal’s unreasonable spending could erode public trust


• Cardinal should consult and collaborate with members of the General Assembly before taking any actions outside of its statutory boundaries

• The Office of State Human Resources should immediately begin reviewing and approving Cardinal CEO salary adjustments

• The Department of Health and Human Services should determine whether any Cardinal CEO salary expenditures should be disallowed and request reimbursement as appropriate

• Cardinal should implement procedures consistent with other LME/MCOs, state laws, and federal reimbursement policy to ensure its spending is appropriate for a local government entity

My favorite? Recoup CEO salaries. Maybe we should extrapolate.

About kemanuel

Medicare and Medicaid Regulatory Compliance Litigator

Posted on May 18, 2017, in "Single State Agency", 1915 b/c Waiver, Accountability, Alleged Overpayment, Alliance, Behavioral health, Beth Wood, Cardinal Innovations, CenterPoint, EastPointe, ECBH, General Assembly, Health Care Providers and Services, Increase in Medicaid Spending, Knicole Emanuel, Legal Analysis, Legislation, Managed Care, MCO, Medicaid, Medicaid Advocate, Medicaid Attorney, Medicaid Audits, Medicaid Billing, Medicaid Budget, Medicaid Contracts, Medicaid Costs, Medicaid Funds, Medicaid Providers, Medicaid Reform, Medicaid Reimbursements, Medicaid Services, Medicaid Spending, Medicare and Medicaid Provider Audits, NC, NC DHHS, North Carolina, Office of State Auditor, Performance audit, Tax Dollars, Taxes, Taxpayers, Transparency, Trillium and tagged , , , , , , , , , , , , , , , , , , , , , , . Bookmark the permalink. 7 Comments.

  1. Thank you for keeping on this story. Cardinal Innovations is out of control and there seems to be no one stopping them.

  2. Geoffrey Zeger

    Keep up the great advocacy work, Knicole! Let’s hope something is finally done about this now that the State Auditor made the impropriety clear.

  3. My question is WHO do we need to call in the General Assembly, The Office of State Human Resource and The Department of Health and Human Services so they know that families know about this audit and we WANT answers! I don’t want this brushed under the rug and nothing done about all this. However, it is hard to make your voice known when you don’t know who to contact. Any ideas?

    • I would suggest contacting your local state senator or house representative. There is currently a draft Bill pending that places limitations on MCO CEO salaries, but it is not expansive enough. For example, it does not limit entertainment and other administrative expenses.

  4. Since the Board at Cardinal voted to decrease his salary, why is his lawsuit Cardinal v SOHR? Cardinal shouldn’t be paying for the lawsuit. Topping should, shouldn’t he?

  1. Pingback: House Bill 403: A Potential Upheaval of Medicaid! | medicaidlaw-nc

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