$1.68 million. That’s what company controlling millions in taxpayer dollars wants back from fired CEO
Article in the Winston Salem Journal today:
Cardinal Innovations filed a lawsuit Monday in Mecklenburg Superior Court against fired chief executive Richard Topping.
The state’s largest managed care organization – which controls hundreds of millions in taxpayer dollars – is suing to recoup $1.68 million in severance from Topping, as well as prevent him from collecting any further payments approved by the former board that was disbanded Nov. 27.
The lawsuit says Topping’s severance represents “excessive and unlawful payments.”
Cardinal oversees providers of services for mental health, developmental disabilities and substance abuse for more than 850,000 Medicaid enrollees in 20 counties, including Forsyth and five others in the Triad. It handles more than $675 million in annual federal and state Medicaid money.
An investigation by McGuireWoods LLP was requested by a reconstituted board, formed in January and approved by state health Secretary Mandy Cohen, along with interim chief executive Trey Sutten. It was conducted by McGuireWoods partner Kurt Meyers, a former federal prosecutor.
The lawsuit represents a new action by Cardinal, and is not in response to the previous board’s lawsuit against the state to allow for executive salaries, including for Topping, that exceeded those permitted by state law.
However, it does represent a follow-up on the temporary restraining order and then preliminary injunction won against Topping and the former board filed in the same court.
The injunction prevents Topping and the former board from interfering with N.C. Department of Health and Human Services’ regulatory actions versus Cardinal that began when Cohen ordered the takeover of the organization on Nov. 27.
The former board took action against Topping’s employment at its Nov. 17 meeting by terminating his contract without cause. The board, at Topping’s request, would have been allowed to stay on through Dec. 1.
Cardinal said in the lawsuit that “Topping’s motive in asking the board to allow him to remain CEO was so that he could use his position as CEO to ensure that Cardinal Innovations paid him the lump-sum severance before his departure.”
Now to my opinion:
Disclosure: I have not read the Complaint and would love someone to send it to me. But, on the face of this article, my experience in the legal world, and my limited knowledge about the whole Topping debacle:
While we can all agree that Topping’s salary, plus bonuses and perks, was absolutely repugnant and offensive to taxpayers (like me), Topping did not get there all by himself. The Board of Directors met, discussed Topping’s salary, and voted to give him that salary. The Board of Directors, essentially, is the heart and the brain of Cardinal Innovations.
Is Cardinal Innovations going to sue itself for bestowing such an outrageous salary, plus benefits, to Topping?
Because if I am Topping and I get sued for having a high salary, I am going to point at the Board of Directors and say, “I couldn’t have gotten paid without your votes, Board. So have fun and sue yourself.”
BTW: Isn’t this lawsuit a conflict of interest?? It was only last year that Cardinal filed a lawsuit asking the court to ALLOW TOPPING TO CONTINUE TO RECEIVE SUCH OUTRAGEOUS SALARY THAT NOW – SAME COMPANY – IS SUING BECAUSE IT GAVE THIS SALARY TO IT CEO…which is it, Cardinal? Or is it just a matter of following the wind of public opinion?
Not to mention – HOW IS CARDINAL FUNDING THE LAWSUIT (ATTORNEYS’ FEES) – WITH OUR TAX DOLLARS!!!!!!! I mean, good for Womble Carlyle, the law firm hired with our tax dollars to spend more money on a losing case (my opinion) because Cardinal mismanaged our tax dollars! Winner, winner, chicken dinner! Last year it got paid to file a lawsuit to keep Topping’s salary and perks. Five months later it’s hired to sue for giving Topping’s salary and perks. See blog.
Does anyone else not see how screwed up this is?????
In the wake of bad press, Cardinal Innovation’s Board of Directors finally acted and cut Richard Topping’s, the CEO, obnoxiously high salary, which is paid with Medicaid fund tax dollars. It seems he received a salary decrease of over $400,000! According to the below article, Topping did not take the news well and stated that he cannot accept the massive decrease in salary. See blog.
Will Topping quit? Who will manage Cardinal?
See article below written by Richard Craver of the Winston Salem Journal:
The salary for the chief executive of Cardinal Innovations Healthcare Solutions has been cut by two-thirds — from $617,526 a year to $204,195 — reducing it to the maximum allowed by North Carolina law. Cardinal’s embattled board of directors passed a resolution on CEO Richard Topping’s salary after a four-hour closed special session that ended about 11 p.m. Tuesday, according to Charlotte radio station WFAE.
The vote was 5-3 in favor of the resolution with two members abstaining and two members absent. The eight members represented a quorum.
Bryan Thompson serves on the Cardinal board as the lone representative from Davie, Forsyth, Rockingham and Stokes counties. He was the chairman of CenterPoint Human Services of Winston-Salem until it was taken over by Cardinal in June 2016. Thompson confirmed Wednesday that he introduced the motion for the resolution. “I am very proud of the work Cardinal Innovations does and the seriousness I observed in the board members last night,” Thompson said. “I fully support the resolution adopted to bring the salary into range as provided by the state.” Ashley Conger, Cardinal’s vice president of communications and marketing, on Wednesday confirmed the board’s salary-reduction resolution. “Richard is still leading the company, and his priority is to ensure stability and continuity for our employees, members and communities as we continue work with the state to address their concerns,” Conger said.
Cardinal’s board chairwoman, Lucy Drake, voted against the resolution. “We brought him in and we offered (the reduced salary) to him. And he has said he cannot accept that,” Drake told WFAE.
It’s unclear if Topping qualifies for a severance package should he choose to resign because of the salary cut. “We have got to find out who on the team is going to stay,” Drake said. “We’ve got to find out who will be running Cardinal. Because this just completely overwhelmed me. I didn’t know this was going this way tonight.” Attending the meeting was Dave Richard, the state’s deputy health secretary for medical assistance and head of its Medicaid program. After the second of two scathing state audits, the N.C. Department of Health and Human Services issued a statement Oct. 2 saying, “Cardinal should immediately bring its salary/compensation package for its CEO in line with the other MCOs, and shed its excessive severance offerings. DHHS will continue to monitor Cardinal’s performance.” Richard told legislators on Oct. 11 that he would present to the Cardinal board a list of state compliance requirements for Cardinal, the largest of the state’s seven behavioral-health managed care organizations, or MCOs. On Wednesday, Richard said through a spokesman that Cardinal’s board is taking steps to comply with state law, “and we look forward to continuing to work with Cardinal to ensure North Carolinians receive excellent care and state resources are handled appropriately.”
The board’s decision represents a stunning about-face for the MCO. On Sept. 18, Cardinal sued the state to maintain what it claims is the authority to pay Topping up to 3½ times more than his peers. Drake issued a statement supporting the lawsuit, which challenges the state’s authority to set executive-compensation limits. Cardinal filed the lawsuit against the Office of State Human Resources with the State Office of Administrative Hearings. Cardinal’s predecessor was formed in part as a legislative experiment for using private sector methods to lower the cost of caring for Medicaid enrollees without sacrificing the quality of care.
Cardinal and Topping have viewed the agency as an independent contractor as part of state Medicaid reform, gaining financial and business flexibility beyond those of other MCOs. That included being able to retain about $70 million in Medicaid savings from fiscal years 2014-15 and 2015-16. Topping has said Cardinal is performing in accord with what legislators have asked it to do. However, Cardinal is considered a political subdivision of the state, with oversight contracts subject to approval by the state health secretary and executive compensation subject to Office of State Human Resources guidelines. Cardinal argues in its complaint that not being allowed to pay Topping up to $635,000 in annual salary could convince him to resign, thereby putting Cardinal “at a significant market disadvantage” recruiting a top executive in the Mecklenburg County business market. “This would result in immediate and irreparable harm to Cardinal Innovations and reduce the organization’s ability to fulfill its mission,” Cardinal said. Topping’s current three-year contract provides severance payments “for a broad range of reasons” beyond termination of employment without just cause. They include:
- If Cardinal is taken over or ceases to be an independent entity.
- If a majority of the board is replaced without the board’s approval.
- If the agency is “materially” affected by statutory or regulatory changes to its services, revenue, governance or employment practices.
About 96,300 Triad Medicaid enrollees may be along for the ride if a day of reckoning arrives for Cardinal. That’s how many individuals could be affected in Davie, Forsyth, Rockingham and Stokes counties involving services for mental health, developmental disorders and substance abuse. Cardinal oversees providers of those services and handles more than $675 million in annual federal and state Medicaid money.
The main issue at hand is executive compensation and severance packages that Cardinal has committed to Topping and 10 other executives, which legislators have called excessive and unacceptable. The Cardinal board approved two raises for Topping since he became chief executive in July 2015. Cardinal’s board minutes are not available on its website, and Cardinal officials have a pattern of responding slowly to public and media requests for those minutes, including a request made Friday that it referred to its legal team.
An internal DHHS audit, released Oct. 1, determined that the salary and severance packages Cardinal’s board approved “pose a substantial risk (to Cardinal) and may not be in the best interest of Cardinal, beneficiaries and/or the state.” “This is excessive and raises concerns about the entity’s solvency and ability to continue to provide services in the event of a significant change in its leadership team,” DHHS said in a statement. In May, the state auditor’s office cited in its audit of Cardinal unauthorized executive compensation and a combined $490,756 in high-end board retreats and “unreasonable spending (that) could erode public trust.”
N.C. Auditor Beth Wood said in May that Cardinal “is not independent of the state … and it is definitely responsible to the General Assembly.” “Its whole independent contractor claims have been taken out of context, and they are being misleading when they say they are,” Wood said. Wood also blamed the Office of State Human Resources for not doing a better job of monitoring Cardinal’s executive-compensation packages.
A bipartisan group of state legislators is urging the state health secretary, Dr. Mandy Cohen, to replace Topping and the board, and/or terminate Cardinal’s state Medicaid contracts, for noncompliance with state laws. State health officials and legislators say they are not ready to predict what steps Cohen might take, which could include splintering Cardinal’s 20-county territory and assigning parts to one or more of the state’s other six MCOs. Cardinal also covers Alamance and Davidson counties. “All of the options are possible,” state Sen. Joyce Krawiec, R-Forsyth, said last week. Krawiec is a member of the Joint Legislative Oversight Committee on Health and Human Services. However, it is not likely that Cohen would approve resurrecting CenterPoint. Since taking office, Cohen has tightened core performance requirements for the MCOs, including adding financial penalties for noncompliance. “These new contracts hold each organization accountable to meeting key performance measures to ensure high-quality care,” Cohen said.
State Rep. Donny Lambeth, R-Forsyth, a co-chairman of the health-care oversight committee, said last week that while it would be cumbersome to divvy up the Cardinal counties “to other MCO who would absorb these services … it can be done.” Counties can request, during a relatively brief period each year, to switch MCOs with the state health secretary’s permission. Three county managers — Dudley Watts of Forsyth, Lance Metzler of Rockingham and Rick Morris of Stokes — said last week that their respective boards of commissioner have not discussed contingency plans in preparation for any action by Cohen on Cardinal. Krawiec said the executive-compensation information about Cardinal is “very disappointing and disturbing.” “While Cardinal has obviously shown us how health services can be delivered at a cost savings, those savings have led to lavish expenditures by Cardinal,” she said. “Instead of returning the savings back into improving the system and providing for those in need, the funds have been spent in a very irresponsible manner.”
Oh, to have been a fly on the wall, during Tuesday’s Board of Directors meeting at Cardinal… We will definitely need to request the meeting minutes!
“NCTracks is on Track” and Once You Tell a Falsehood, You Have to Tell a Dozen More Lies to Stick to That Falsehood
Today the Department of Health and Human Services (DHHS) released a press release touting, “NCTracks is on Track.”
Despite all the publicity from the media that so many Medicaid providers are suffering, that so many Medicaid providers have not been paid since June 20, 2013, that so many Medicaid providers are close to bankruptcy (some have already closed offices), and despite all the Medicaid providers’ statewide, outcries of nonpayment, and some providers even escalating their outcries to threats of lawsuits due to nonpayment of Medicaid reimbursements, DHHS, still, steadfastly, remains pertinaciously and obtusely rigid in its declaration that NCTracks is great. “Problems?” asks DHHS. “Sure, minor problems. But nothing major…”
Yet, because of problems with NCTracks:
- A dentist in Winston-Salem, NC, was forced to close one of two practices and terminate 6 staff.
- A pediatric physician in Elkins, NC, could not afford groceries for a week until her husband was paid.
- A home health company in Granite Falls, NC, is close to closing is doors, terminating all staff, and ceasing to help the Medicaid recipients.
- An oral surgeon was forced to manually enter all claims, day and night, causing time away from Medicaid patients and mental anguish, including sleeplessness and emotional bouts.
- At least 3 behavioral health providers (that I know of) have stopped accepting Medicaid.
- At least 5 dentists (that I know of) have stopped accepting Medicaid.
- A pediatric physician was forced to borrow money from his or her parents to keep the practice open.
- A pediatric dentist in Charlotte was forced to take out a $100,000 loan to keep the practice open.
- Medicaid providers have spent countless hours on the phone, taking away desperately needed, clinical time from Medicaid recipients, only to receive zero help from “Helpline operators” with no knowledge of NCTracks.
- A group of Medicaid providers became so frustrated that they started a Facebook page called “NC Tracks Problems. As of today, NC Tracks Problems has 86 members, including me, so really, 85 Medicaid providers who are so frustrated that they joined a Facebook page to vent, ask for help, and console one another.
I guess DHHS would say to those providers who have been forced to close offices, have been unable to afford groceries, have had to terminate staff, and have cried themselves to sleep from stress, “Don’t worry. It’s just small glitches. We should have it all figured out within 90 days.”
It has been 30 days, plus. Many providers will not make it through 90 days. Providers and their staff will be unemployed. (Our taxes that have been paid to CSC for NCTracks, additional tax dollars will then be paid to providers and staff for unemployment benefits). Medicaid recipients will not receive medically necessary services. But, at least, DHHS won’t lose face. Because if DHHS refuses to accept the fact that serious problems exist with NCTracks, then those serious problems do not exist. If DHHS refuses to acknowledge that a pediatric physician could not afford groceries because of NCTracks, then it must not be true.
I am reminded of fable, “The Monkey and the Dolphin.” Anyone remember this fable?
Just in case, you don’t remember “The Monkey and the Dolphin,” it is an Aesop’s fable.
A sailor set sail and brought a monkey for entertainment (I mean, who wouldn’t?). Nasty weather caused the ship to sink and the sailor and the monkey were swimming at sea. A dolphin sees the monkey and, mistaking him for a human, helps the monkey swim to shore. (I have no idea why the dolphin did not actually get the real human, but then we would have no moral of a story).
During the swim to Greece (apparently they were close to Greece), the dolphin asks the monkey if he is an Athenian (Athens, Greece…get it?). The monkey, trying hard to act like a human, yet also acting like many humans I know, who try to sound way cooler than they are, answers that, not only is he an Athenian, but he hails from the noblest family in Athens. Getting closer to Athens, the dolphin asks whether the monkey is familiar with the Piraeus, a famous harbor in Greece. The monkey, having to continue with his facade/falsehood of hailing from a noble family residing in Athens, but having no idea what Piraeus is, imagines that the Piraeus is a person and responds that Piraeus is one of his best friends.
The dolphin realizes the monkey has been lying and drowns him (I agree, drowning for lying is a somewhat harsh punishment, but this was a long time ago and fictional).
The moral of the story:
“He who once begins to tell falsehoods is obliged to tell others to make them appear true, and, sooner or later, they will get him into trouble.” (Obviously, Aesop lived before any feminist movement).
Or, once you tell a falsehood, you have to tell a dozen more lies to stick to that falsehood. -Knicole Emanuel
Remember back when NCTracks first went live? The first week of July?
Five days after NCTracks went live, DHHS announced that NCTracks is operational and successfully processed its 1 millionth claim. A few quotes about glitches, but nothing big.
Then, July 8, 2013, DHHS touts that NCTracks is so great, so wonderful that NCTracks pays providers ahead of schedule.
We hail from the noblest family in all of Athens!!
Then, August 5, 2013, “NCTracks is on Track.”
Oh, yes, Piraeus…he’s my best friend!!!
So what do we expect DHHS to do? Publicly declare NCTracks a total and complete failure?
No. Nor do I purport that NCTracks is a total and complete failure. Just that serious problems exist with NCTracks and that the administration should admit that serious problems exist with NCTracks, not gloss over serious problems and not ignore the elephant in the room (because it is an exceptionally large elephant). Take responsibility. Take accountability. Admit problems exist and propose solutions.
Nor do I wish to downplay the successes of NCTracks. Obviously, some providers are getting paid, and that is a great thing.
But do not turn a deaf ear to the many, many providers who are not getting paid. And who are truly suffering. Do not continue tell more lies to make the first falsehood appear true.
A few months ago, my little girl lied to me about brushing her teeth. We had recently been camping, and I had thrown all our bathroom supplies in one bag in order for us girls to walk to the shower together. We got home and my girl unpacked her suitcase, but she did not have the toiletries bag with her toothbrush to unpack. I didn’t think about her toothbrush. Monday, Tuesday and Wednesday, I used my toiletries out of the bag (yes, I did not unpack…I was tired and trying to catch up on work), but did not notice her toothbrush was in the bag in my bathroom. Monday, Tuesday, and Wednesday night my husband and I asked my little girl whether she brushed her teeth. She said yes. Not only did she say yes, but she approached me and him, opened her mouth wide, and purported to breath deeply onto us so we could smell her breathe (in truth, the little booger was making the noise of breathing on us, but not really letting air come out). My husband went upstairs Thursday night (our bedroom is downstairs; hers is upstairs) to cut off her light…she had fallen asleep reading. He cut off her bathroom light and noticed there was no toothbrush in her bathroom. The next morning was not pretty. My husband confronted her about not having a toothbrush. I believe the interrogation went like this (at 6am):
Husband: You’ve brushed your teeth every night this week , right?
Daughter: Yes, sir.
Husband: You sure?
Daughter: Yes, sir.
Husband: Ok, let’s go upstairs and you show me your toothbrush.
Husband: [Knowing he has her caught] Come on. Come show me your toothbrush.
Daughter: [With tears welling up in her eyes] I don’t know where it is.
[Skip a bunch of lines.] [Obviously, the girl’s teeth were funky.]
Husband: Daughter, I am not angry that you did not brush your teeth. I am angry that you lied about it.
If you are a parent, you have said this. I am not angry about [your action]; I am angry that you lied about it.
In this blog, I have intentionally NOT used “lie” and “falsehood” interchangeably. Maybe its a small, mundane technicality, but, in my mind, a “lie” and a “falsehood” are different. In my mind, a lie is just wrong…intentional and with malice. A falsehood, in my mind, is a “white lie.” Wrong….but not SO bad. More like…sweetie, you look great in those pants.
My quote: “Once you tell a falsehood, you have to tell a dozen more lies to stick to that falsehood,” you start with a falsehood…a white lie…but you have to tell lies to make people believe that falsehood. Falsehoods don’t start out intentional and with malice.
“NCTracks is operational and successfully processed its 1 millionth claim.” “NCTracks is so great, so wonderful that NCTracks pays providers ahead of schedule.” “NCTracks is on Track.”
I am not angry/upset/disappointed that NCTracks is not working for some providers. (OK, maybe a little (or a lot)…but, to me, the fact that NCTracks is not perfect the 1st month it went “live” is not the issue). It’s the fact that DHHS is refusing to admit that serious problems exist.
The toothbrush is still packed, but DHHS is claiming to have brushed its teeth with its BFF Piraeus.