Category Archives: Certification of MCOs
Merger of Cardinal and Eastpointe: Will [Should] It Go Through?
What if, right before your wedding day, you discover a secret about your betrothed that changes the very fabric of your relationship. For example, you find out your spouse-to-be is actually gay or a heroin addict. Not that there is anything bad about being gay or a heroin addict, but these are important facts to know and accept [or reject] about your future mate prior to the ringing of the wedding bells. The same is true with two companies that are merging to become one. The merged entity will be liable for any secrets either company is keeping. In this hypothetical, Eastpointe just found out that Cardinal has been cheating – and the wedding is set for July 1!
Cardinal Innovations and Eastpointe, two of our managed care organizations (MCO) charged with managing Medicaid behavioral health care funds plan to merge, effective July 1, 2017. Together the monstrous entity would manage Medicaid behavioral funds for 32 counties.
Last week the State Auditor published a scathing Performance Audit on Cardinal. State Auditor Beth Wood found more than $400,000 in “unreasonable” expenses, including corporate retreats at a luxury hotel in Charleston, S.C.; chartering planes to fly to Greenville, Rocky Mount and Smithfield; providing monthly detailing service for the CEO’s car; and purchasing alcohol, private and first-class airline tickets and other items with company credit cards.
Cardinal’s most significant funding is provided by Medicaid. Funding from Medicaid totaled $567 million and $587 million for state fiscal years 2015 and 2016, respectively. In other words, the State Auditor found that Cardinal is using our tax dollars – public money obtained by you and me – for entertainment, while concurrently, denying behavioral health care services and terminating providers from its catchment area. Over 30% of my salary goes to taxes. I do not accept Cardinal mismanaging my hard earned money – or anyone else’s. It is unacceptable!
“The unreasonable spending on board retreats, meetings, Christmas parties and travel goes against legislative intent for Cardinal’s operations, potentially resulting in the erosion of public trust,” the audit states.
Eastpointe, however, is not squeaky clean.
A June 2015 Performance Audit by the State Auditor found that its former chief financial officer Bob Canupp was alleged to have received kickbacks worth a combined $547,595. It was also alleged that he spent $143,041 on three agency vehicles without a documented business purpose. Canupp, chief executive Ken Jones and other employees also were determined to have used Eastpointe credit cards to make $157,565 in “questionable purchases.” There has not been an audit, thus far, on Eastpointe’s management of public funds. One can only hope that the results of the Cardinal audit spurs on Beth Wood to metaphorically lift the skirts of all the MCOs.
Given the recent audit on Cardinal, I would like to think that Eastpointe is hesitant to merge with such an entity. If a provider had mismanaged Medicaid funds like the State Auditor found that Cardinal did, without question, the authorities would be investigating the provider for Medicaid fraud, waste, and abuse. Will Eastpointe continue with the merger despite the potential liability that may arise from Cardinal’s mismanagement of funds? Remember, according to our State Auditor, “Cardinal could be required to reimburse the State for any payroll expenditures that are later disallowed because they were unauthorized.” – Post-payment review!!
Essentially, this is a question of contract.
We learned about the potential merger of Cardinal and Eastpointe back in January 2017, when Sarah Stroud, Eastpointe’s chief executive, announced in a statement that the agency plans to negotiate a binding agreement within weeks. The question is – how binding is binding?
Every contract is breakable, but there will be a penalty involved in breaching the contract, usually monetary. So – fantastic – if Eastpointe does back out of the merger, maybe our tax dollars that are earmarked for behavioral health care services for Medicaid recipients can pay the penalty for breaching the contract.
Another extremely troubling finding in Cardinal’s State Audit Report is that Cardinal is sitting on over $70 million in its savings account. The audit states that “[b]ased on Cardinal’s accumulated savings, the Department of Health and Human Services (DHHS) should consider whether Cardinal is overcompensated. For FY 2015 and 2016, Cardinal accumulated approximately $30 million and $40 million, respectively, in Medicaid savings. According to the Center for Medicaid and Medicare Services (CMS), Cardinal can use the Medicaid savings as they see fit.”
As Cardinal sees fit??!!?! These are our tax dollars. Cardinal is not Blue Cross Blue Shield. Cardinal is not a private company. Who in the world thought it a good idea to allow any MCO to use saved money (money not spent on behavioral health care services for Medicaid recipients) to use as it sees fit. It is unconscionable!
Because of my blog, I receive emails almost daily from mothers and fathers of developmentally disabled or mentally handicapped children complaining about Cardinal’s denials or reductions in services. I am also told that there are not enough providers within the catchment area. One mother’s child was approved to receive 16 hours of service, but received zero services because there was no available provider. Another family was told by an MCO that the family’s limit on the amount of services was drastically lower than the actual limit. Families contact me about reduced services when the recipient’s condition has not changed. Providers contact me about MCO recoupments and low reimbursement rates.
Cardinal, and all the MCOs, should be required to use our tax dollars to ensure that enough providers are within the catchment areas to provide the medically necessary services. Increase the reimbursement rates. Increase necessary services.
According to the report, “Cardinal paid about $1.9 million in FY 2015 employee bonuses and $2.4 million in FY 2016 employee bonuses. The average bonus per employee was about $3,000 in FY 2015, and $4,000 in FY 2016. The bonuses were coded to Cardinal’s administrative portion of Medicaid funding source in both years.” Cardinal employs approximately 635 employees.
Good to know that Cardinal is thriving. Employees are overpaid and receive hefty bonuses. Executives are buying alcohol, private and first-class airline tickets and other items with company credit cards. It hosts lavish Christmas parties and retreats. It sits on a $70 million savings account. While I receive reports from families and providers that Medicaid recipients are not receiving medically necessary services, that there are not enough providers within the catchment area to render the approved services, that the reimbursement rates for the services are too low to attract quality providers, that more expensive services are denied for incorrect reasons, and that all the MCOs are recouping money from providers that should not be recouped.
If I were Eastpointe, I would run, regardless the cost.
The Merger of the MCOs!
Breaking News: From DHHS
Raleigh, NC
State health officials announced today that the state- and Medicaid-funded Local Management Entities/Managed Care Organizations providing mental health, intellectual and developmental disability and substance use services to North Carolina citizens will be consolidating into four service regions across the state.
Further consolidation will improve quality of services, accessibility, accountability and long-term sustainability.
“I’m a strong believer in LME/MCOs,” said Rick Brajer, Secretary of the Department of Health and Human Services. “These populations deserve dedicated management.”
The newly consolidated service areas are:
- North Central Region: CenterPoint Human Services and Cardinal Innovations Healthcare Solutions will be merging
- South Central Region: Sandhills Center and Alliance Behavioral Healthcare will be merging
- Eastern Region: Eastpointe and Trillium Health Resources will be merging
- Western Region: Partners Behavioral Health Management and Smoky Mountain LME/MCO will be merging
The Future of NC Medicaid Behavioral Health: Will We Soon Be Down to Eight MCOs? Two More Monkeys Jumping off the Bed?!
Remember the song “10 Little Monkeys Jumping on the Bed?”
Ten little monkeys jumping on the bed.
One fell off and broke his head.
Mama called the doctor and the doctor said,
“No more monkeys jumping on the bed!”
Nine…Eight…Seven…Six…Five…Four…Three…
I used to love that song as a kid. I have two siblings and I distinctly remember our jumping-on-the-bed-game-while-trying-to-push-the-others-off-game. Many times we would sing “10 Little Monkeys Jumping on the Bed,” while trying to push our siblings off the bed.
Here in North Carolina we started with 11 managed care organizations (MCOs) across NC to manage behavioral health care for Medicaid recipients.
See the map? We began with 11 MCOs. Today, we have 10 (Western Highlands Network (WHN) is no more) with strong possibilities of reducing the number of MCOs to 9…and then 8.
Rumor has it that Centerpoint Human Services (Centerpoint) and MeckLINK Behavioral Healthcare (MeckLINK) are on the brink of nonexistence. “One fell off and broke his head.”
Centerpoint and MeckLINK are, however, moving forward to nonexistence in entirely different ways. Centerpoint is looking to merge with two MCOs. Both Partners Behavioral Health Management (Partners) and Smoky Mountain Center (SMC) are getting updates as to Centerpoint’s merger plans. Will Centerpoint break up its catchment area and merge with 2 MCOs? Or are those 2 MCOs the contenders? Not sure. But either way, Centerpoint will be eliminated in the near future.
If SMC absorbed Centerpoint entirely, SMC will be HUGE!!
SMC began with Alexander, Alleghany, Ashe, Avery, Caldwell, Cherokee, Clay, Graham, Haywood, Jackson, Macon, McDowell, Swain, Watauga and Wilkes Counties (15 counties). Then SMC ate up WHN and acquired Buncombe, Henderson, Madison, Mitchell, Polk, Rutherford, Transylvania and Yancey counties. (15 + 8 = 23 counties).
Centerpoint manages behavioral health care for Forsyth, Stokes, Davie and Rockingham counties.
(15 + 8 + 5 = 28 counties). Over 1/4 of NC’s counties. The MCO map would be dominated by dark blue, and, as North Carolinians, let me ask you, do we want our state dominated by dark blue? What about Wolfpack red?
Here is the MCO map, as of October 2013:
Partners’ catchment area is light yellow and includes Burke, Catawba, Cleveland, Gaston, Iredell, Lincoln, Surry, and Yadkin counties (all in the west and bordering SMC’s catchment area). If SMC continues to expand, like Stephen King’s “The Blob,” SMC may ooze into Partners.
Unlike Centerpoint, at least on paper, MeckLINK is not willingly jumping off the bed and breaking its head. MeckLINK is the only MCO run by a county (Mecklenburg county). See the lone red county? In May, state lawmakers passed a bill that says a county can’t run its own organization. Mecklenburg County Commissioners voted last Tuesday to work out a deal with Cardinal Innovations Healthcare Solutions (Cardinal) or dissolve MeckLINK when its contract expires next April.
Cardinal’s catchment area is purple and includes 15 counties.
But do not underestimate the power of usurping MeckLINK, even though it is only one county. Mecklenburg county is one of NC’s most populous counties, which means it receives a hefty Medicaid budget.
Ten little MCOs jumping on our heads One fell off; its assets in the reds, DMA called the doctor and the doctor said No more MCOs jumping on our heads. Nine little MCOs jumping on our heads…So which MCOs will survive? How soon until we only have 8 MCOs? Will all the MCOs be replaced with out-of-state, huge MCOs? Will the future MCOs manage all Medicaid services? Will there be carve-outs? These are unanswered questions as we embark into the future of NC Medicaid managed care.
One thing we do know is we started with 11 MCOs (all of whom were deemed solvent and competent by a state contractor) and, not even 1 year later, WHN falls…MeckLINK falls…and Centerpoint falls.
11…10…9…8…
Maybe the 11 MCOs were not solvent and competent in the first place. Why else would the MCOs keep jumping off and breaking their heads? Silly monkeys.
DHHS’ Robotic Certification of MCOs…So Stepford-ish!
Senate Bill 208, Session Law 2013-85, requires the Secretary of the Department of Health and Human Services (DHHS) to conduct certifications to ensure the effectiveness of the managed care organizations (MCOs), and the first certification was to be before August 1, 2013. N.C. Gen. Stat. 122C-124.2 was added as a new section by Session Law 2013-85 and states:
“In order to ensure accurate evaluation of administrative, operational, actuarial and financial components, and overall performance of the LME/MCO, the Secretary’s certification shall be based upon an internal and external assessment made by an independent external review agency in accordance with applicable federal and State laws and regulations.”
In order to comply with the statute, Secretary Wos conducted the first certification and published the findings July 31, 2013. Well, actually Carol Steckel signed the certification and sent it to Sec. Wos (technically Wos did not conduct the certification, but she certified the content).
Steckel’s certification states that “DMA is attesting that all ten [MCOs] are appropriate for certification.”
Strong language!
Attest means to provide or service as clear evidence of. See Google. Clear evidence? That the MCOs are compliant?
One of the areas that was certified was that the MCOs are timely paying providers, that the MCOs are accurately processing claims, and that the MCOs are financially accurate (whatever that means).
Here is the chart depicting those results:
Wow. Who would have guessed that East Carolina Behavioral Healthcare (ECBH) is 100% compliant as to timely payments to providers, 100% compliant as to accuracy of claim processing, and 100% compliant as to financial accuracy. ONE HUNDRED PERCENT!! As in, zero noncompliance!!
I mean…Wow! Wow! Wow! Wow! Wow!
Have you ever read “The Stepford Wives?” The book was published in 1972 by Ira Levine.
Basically, the main character, Joanna Eberhart and her husband move to Stepford, Connecticut (a fictional place). Upon arrival, Joanna and spouse (I can’t remember his name, so we will call him Ed) notice that all the woman are gorgeous, the homes are immaculate, and the woman are all perfectly submissive to their husbands (how boring would that be??). As time passes, Joanna becomes suspicious of the zombie-like actions of all the wives.
She and her friend Bobbie (until Bobbie turns zombie-like) research the past of the Stepford citizens and discover that most of the wives were past, successful business women and feminists, yet become zombie-like. At one point, they even write to the EPA inquiring as to possible contamination in Stepford.
After Bobbie turns zombie-like, Joanna fears that the women are changed into robots. She decides to flee Stepford, but is caught and is changed into a robot. The books concludes with Joanna happily and submissively walking the grocery store with a large smile and robotic movements, and another wife moving into Stepford.
That book coined the word “Stepford” to mean someone acting as a robot, submissive, or blissfully following orders.
I am not saying that the DMA certification was conducted as a Stepword wife…I am merely explaining that I was reminded of “The Stepford Wives” when I read the certification. Maybe there is no analogy to be made…you decide.
Upon quick review of the certification, a number of questions arise in my mind. Such as…didn’t anyone proofread this??? Under each graph, it states “Data is based on a statistical sample of Medicaid claims processed between February and May of 2013 for each LME-MCO.” Data is???
Hello!…It is data ARE, not data is!! Data are; datum is.
Besides the obvious grammar issue, I am concerned with the actual substance of the certification.
Nothing is defined. (Not surprising for an entity that doesn’t know data are plural). Except “compliant” is defined on the last page as “A finding of “compliant” means that HMS found that the LME-MCO was compliant with the requirements set forth in SB 208.” That is like saying, “Beautiful is hereby defined as whatever I say is beautiful.” That is not a definition.
And HMS? HMS, as in, the company North Carolina hired as a Medicaid recovery audit contractor (RAC)? I do not know if HMS the RAC and HMS the credentialing company is the same company…but the names sure are similar.
Speaking of RACs, going back to the basis of the data…”a statistical sample?” (Which is not defined?) What is a statistical sample? Is this a statistical sample like Public Consulting Group’s (PCG) in extrapolation audits? From where does the sample come?
Looking at the timeliness of provider payments, the lowest percentage is CoastalCare. At 93.06%. But what does that mean? That CoastalCare takes longer than 30 days to pay providers in 6.94% of cases? And what is noncompliance? 80%? 20%? Because where I went to school, a 93% is a ‘B.’ Yet 93%, here, is “compliant.” Does “compliant” mean not failing?
What is “claims processing accuracy?” Does that mean that ECBH was 100% correct in processing (or not processing) claims based on medical necessity (or failure to meet medical necessity)? or, merely, that the process by which ECBH processes claims (regardless of whether the process abides by clinical policy), does not deviate; therefore ECBH is 100% compliant?
How does one determine 100% compliance? Does this certification mean that between February and May 2013, Sandhills paid 100% providers timely. That for 4 months, Sandhills was not late for even one provider? Because Sandhills had 100% in relation to timely provider payments. (Personally, I would be extremely hesitant to attest for any entity achieving 100% compliance. How easy would that be to disprove?? A journalist finds one mistake and the certification loses all credibility).
The next chart demonstrates the MCO’s solvency.
I have to admit…this chart makes very little sense to me. The only information we get is that greater than 1.0 equals compliance. If you ask me, being greater than 1 seems like a very low bar.
But, if greater than 1 equals compliance, then, applying Logic 101, the higher the number the more solvent. I could be wrong, but this makes sense to me.
Using that logic, in February MeckLINK was N/A (not “live” yet). March: 1.32. April: 1.54. May: 1.80. Tell if I’m wrong, folks, but it appears to me that MeckLINK, according to HMS and unknown data, that MeckLINK is becoming more solvent as the months pass.
And this is the same MCO that WFAE cited was using accounting tricks to remain in the black????
And the same MCO that, come March 1, 2014, must be acquired by another MCO? And then there were 9…
Under the chart demonstrating the “Solvency Review,” it states, “Data is (sic) base don financial information…” Duh!! I thought we’d review employee personnel records to determine solvency!! (Although…that could be helpful because we could see employee salaries…I’m just saying…).
What the certification does not say is financial information from whom? The MCOs?
Secretary Wos: “Hey, Alliance, are you solvent?” Alliance: “Yes, Secretary.” Secretary Wos: “Oh, thank goodness! I wouldn’t know what to do if you were not!!”Going back to the finding of compliance means HMS determined compliance…Does that mean that HMS compiled all the data? What about the intradepartmental monitoring team? Does the intradepartmental monitoring team just authorize whatever HMS says it finds? Almost…Stepford-like.
The letter from Steckel showing DMA’s attestation of all 10 MCOs being appropriate for certification says just that…DMA is attesting that all 10 MCOs are appropriate for certification. No analysis. No individual thinking. Almost…Stepford-like.
Then the letter from Sec. Wos to Louis Pate, Nelson Dollar, and Justin Burr (legislatures) regurgitates Steckel’s letter. Except Wos’ letter says “I hereby certify that the following LME-MCOs are in compliance with the requirements of NC Gen. Stat 122C-124.2(b).”
Again, no analysis. No independent thinking. Steckel’s letter is dated July 31, 2013; Sec. Wos’ letter is dated July 31, 2013. Wos did not even take ONE DAY to verify Steckel’s letter.
Zombie-like.
Stepford-like.
What good is a statute requiring DHHS to certify the MCOs every 6 months if each certification is attested to by a Stepford??
