Genevieve Athens had high hopes in June 2016 when CenterPoint Human Services merged with Cardinal Innovations Healthcare Solutions, the largest of North Carolina’s seven behavioral-health managed-care organizations.
Cardinal oversees services for people with mental health, substance abuse and intellectual/developmental disabilities. That affects more than 96,000 Medicaid enrollees in the Triad and more than 850,000 overall scattered over 20 counties.
Athens moved from Portland, Ore., to Lewisville in 2014 with her family, including a 22-year-old daughter with autism spectrum disorder who receives limited intellectual and developmental disabilities, or I/DD, services through Cardinal. Athens asked that her daughter’s name not be used because she has a job outside the home.
“People with lifelong developmental disabilities, such as autism, are the most vulnerable in our society,” Athens said. “I know some parents with adult children that have been denied services because their child is too high functioning. Continuity is really critical for I/DD recipients.”
Advocates and community officials also said they were closely monitoring whether Cardinal and its executive director, Richard Topping, would make good on their commitments to provide additional funding to reduce yearslong waiting lists for services and to be transparent in how it oversees service providers in Davie, Forsyth, Rockingham and Stokes counties.
“We wanted assurances that local money stayed local, that community services would remain provided locally and that local projects would move forward considering the money we have saved for them, like the crisis center,” Bryan Thompson, CenterPoint’s chairman, said in October 2015 when its board voted to merge with Cardinal. He was referring to the 24-hour Highland Avenue Crisis and Recovery Center in Winston-Salem. “When we got the final agreement ... all that we asked for was there.”
Thompson joined the Cardinal board as the lone local representative. He was ousted from the board Nov. 17 in the aftermath of offering a successful motion to lower Topping’s salary from $635,000 a year to the $204,195 maximum allowed by state law.
The hopes for Cardinal have deflated over the past 17 months, leaving families and advocates and a bipartisan group of state legislators frustrated over a range of issues, including Cardinal’s spending habits.
Cardinal’s management cut funding for recipient services and advocacy initiatives, hamstringing some providers with reimbursement cuts, and it operated with little to no financial, management and board transparency.
Athens said that since the Cardinal takeover of CenterPoint, “respite care providers have endured a reduction in pay, individual care coordinators for certain services were eliminated, and Forsyth maintains one of the highest wait lists for innovations (services) with more than 900 individuals.”
Respite care typically consists of temporary care for a dependent — whether elderly, chronically ill, handicapped or disabled — that provides relief for their usual caregivers. Athens’ daughter receives respite services from Easter Seals.
In Forsyth County, Cardinal said in June that it would shift the Highland Avenue behavioral-health crisis center from having inpatient beds and around-the-clock care to one that would keep people less than a day.
The original goal was to help ease overcrowding in hospital emergency rooms by diverting individuals experiencing a mental health and/or substance abuse crisis to the Highland center. Forsyth County commissioners approved a 40-year lease for the center in June 2015, in large part because of the around-the-clock care component.
Instead, Cardinal chose to transfer individuals needing more than 24 hours of treatment to facilities in Concord, Lexington and Statesville.
It wasn’t long before the frustration of service recipients caught the eye of state regulators. A series of scathing state audits critical of Cardinal culminated in a dramatic management shake-up, with the board voting to fire Topping on Nov. 17.
Last Monday, Topping and the board were removed from any Cardinal authority by order of N.C. Secretary of Health Mandy Cohen. Topping, who whose last day was supposed have been Friday, was told by Cohen to leave immediately and has been barred from all Cardinal’s campuses.
State law permits the health secretary to remove the executive director and the board of a behavioral-health managed-care organization, or MCO, as well as end its contract with the state Medicaid program, if the secretary determines that the MCO demonstrates serious financial mismanagement or regulatory noncompliance.
“There has been a serious mismanagement of funds,” Cohen told state legislators.
Athens said her daughter works five hours a week at a local bakery.
“Because of her anxiety, she cannot work more hours than this,” Athens said. “She also receives Social Security insurance, but at a reduced rate since she works.
“Her monthly income is $575 per month. I don’t need to tell you that this is far below the poverty level in the U.S.”
In December 2016, Athens sent a letter to state legislators serving on health-care committees. She told them that Cardinal’s reimbursement cutbacks had led the contractors serving her daughter to reduce their employees’ hourly pay from $12 to as little as $8.25.
Among the contractor’s services is driving Athens’ daughter to work and to her volunteer jobs.
“Those providers do not get reimbursed for mileage, so a $3.75 an hour cut is significant,” Athens said.
At times, Athens’ daughter has made up the contractor’s wage difference with her own pay. Athens said her family recently has chosen to reimburse the drivers for their mileage costs, which average about $75 a month.
“I filed a grievance with (previous provider Universal) about the pay reduction and was denied,” Athens said. “They said there is no ‘medical justifiable reason’ that (my daughter) has that would cause them to pay more for this respite care person.
“But, of course, Cardinal sets the rates and probably those stipulations, so I see this as an indirect denial from Cardinal.”
When asked about service cuts, Cardinal said Triad consumers are receiving some services “that were previously underutilized in the region, such as doubling the number of members receiving peer support.”
“We have increased access to specialty service providers so that Medicaid members in the Triad can now access services from any contracted providers, not just those previously contracted with CenterPoint.” it said.
Athens said she has been told by Cardinal that her daughter — who has been on the enhanced services waiting list since shortly after the family’s arrival — could remain on it for another five to 10 years.
Athens and other advocates also question the pay of Cardinal executives.
Those questions were echoed by members of the N.C. General Assembly.
In February 2016, legislators requested that the N.C. Auditor’s Office conduct an audit “relating to Cardinal operating outside of its statutory mission and extravagant or excessive spending.”
The audit, released in May, found board approval — without authorization from the state — of executive compensation in the millions of dollars for its 11-member team, along with high-end board retreats outside the state and other “unreasonable spending that could erode public trust” in Cardinal.
The audit determined Topping had been paid at least $1.2 million more in salary than state law allows for a behavioral-health MCO executive director.
This year alone, Topping’s salary bounced from $635,000 to $400,000 on July 1, then to $617,526 on Oct. 15, and then to $204,195 on Oct. 17, the state maximum.
Cohen told legislators last week that she found the executive compensation, including a combined $3.8 million in four severance packages, to be “exorbitant.”
Athens said in her letter to legislators that “you can imagine my shock and disappointment when I see the architect of the cuts, Richard Topping, making the kind of money he is making.”
“How can a person that is in charge of this population justify making that compensation and make cuts to people with I/DD at the same time?” Athens asked. “Where is the oversight?
“The Cardinal board of directors was complicit in everything unearthed by state audits.”
Similar concerns were expressed to a Mecklenburg Superior Court judge Wednesday, who responded by approving a 10-day temporary restraining order that prevents Topping and the ousted Cardinal board members from having access to Cardinal funds.
There are plans to have members of a new Cardinal board in place by Dec. 15, though the N.C. Department of Health and Human Services will likely operate Cardinal for at least six months.
Athens and other mental-health advocates applaud the DHHS for taking over Cardinal, but they also question why it took so long for the state to step in.
“The dialogue we have tried to have with Cardinal management has resulted in little change in the relationship between our community and Cardinal,” said Laurie Coker, a statewide behavioral-health advocate and former member of the CenterPoint board. “Our community remains frustrated.”
Coker said she believes there has in the past been “a lack of political will” to take on Cardinal.
“There are people who stand to gain politically and financially when they do not disrupt a company that is expanding and increasing its earnings like this MCO has,” she said. “The second reason — one that many of us feel is the bigger problem — is that unempowered, stigmatized, humbled folks are not legitimately valued.
“In fact, when not socially engaged and valued, we become less well,” Coker said. “When we are less well, we are an easy market for profit-makers who keep us or family members at arm’s reach or figuratively sweep our concerns under the rug.
“It is arguable that some people may not want us to become well enough not to depend so much on the system,” she said.
Robin Miller, a board member of Horizons Residential Care in Rural Hall, said the center and the board “have experienced firsthand the frustration of working with Cardinal.”
“We had requested a review and increase of Medicaid reimbursements for our residents, and it took repeated attempts and follow-up for them to acknowledge even considering our request,” Miller said.
The publicizing of Topping’s compensation, as well as that of other executives, and the level of non-core, board-approved spending “is frustrating to see when we have to almost beg for reimbursement increases to cover ongoing increases in care expense,” Miller said.
“In spite of what Cardinal may consider as adequate funding for appropriate care, our residents deserve more than basic minimum care.
“They deserve a loving, caring environment,” Miller said. “Horizons strives to deliver quality care in a safe, caring residential setting with dedicated folks focusing on and advocating for our most fragile citizens in spite of MCOs like Cardinal.”
Richard Anderson, the chief executive of Horizons, said the organization is looking ahead.
“We are confident that Secretary Cohen and her team are handling the Cardinal issues appropriately,” Anderson said. “We look forward to working with the new leadership at Cardinal. Our relationships with all MCOs are positive and supportive, and we look forward to continuing those relationships.
“We consider all of our MCOs to be partners in providing quality care,” he said. “We are thankful that Horizons and North Carolina DHHS have leadership that is well-prepared to guide us through the coming changes with Cardinal.”
Trail of money
Cardinal is qualified to receive $100 million in state and federal money from the N.C. Division of Mental Health for fiscal 2017-18, along with Medicaid funding of $238 million from the state and $483 million from the federal government.
Cardinal has been pushed by advocates and legislators for years to provide money from its fund balance — estimated at between $140 million and $271 million — to reduce the number of people locally on the state I/DD waiting list, which has 12,000 people on it who are waiting for additional services.
For example, the 2015-17 state budgets reduced financing for the then-eight MCOs by $110 million for 2015-16 and by $152 million for 2016-17.
Legislators, however, required the MCOs to provide the same level of services each fiscal year by pulling from fund reserves to make up the difference. At that time Cardinal had $129.2 million in its reserve fund, the second highest amount.
“The primary reason legislators recovered some of their investment reserves was because (the MCOs) were banking their funds rather than funding the services that are desperately needed to meet the demands,” state Rep. Donny Lambeth, R-Forsyth, a key writer of state Medicaid reform legislation, said in February 2016.
Knicole Emanuel, a lawyer at Gordon & Rees in Raleigh with a focus on Medicaid litigation, writes a popular legal blog on behavioral-health issues in North Carolina. Cardinal has proved to be a popular venting target in recent years.
“I receive so many emails, including parents of disabled children, who are not receiving the medically necessary Medicaid behavioral-health-care services for their developmentally disabled children,” Emanuel said.
“MCOs are terminating qualified health-care providers. MCOs are putting access to care at issue. MCOs are nickel-and-diming health-care providers.”
John Nash, the executive director for Raleigh-based The Arc of North Carolina, expressed his concerns about how Cardinal “has wasted valuable and limited resources,” while acknowledging the daily effort of Cardinal’s hands-on staff.
“The Arc of North Carolina does have documentation of individuals with disabilities who were in crisis being turned down for services by Cardinal Innovations,” Nash said. “However, since DHHS has taken over Cardinal Innovations, we are getting responses on some of the highest priority individuals who need services.”
Vicki Smith, the director of Disability Rights NC, said she “applauds Secretary Cohen’s actions, which send a clear message — the needs of Cardinal’s vulnerable behavioral-health communities must come first.”
Disability Rights, based in Raleigh, is North Carolina’s federally funded protection and advocacy agency for people with disabilities, including those with mental-health challenges. The agency has a reputation for filing legal challenges against state and local elected officials regarding allocation of limited resources.
For example, Disability Rights has been at the forefront of the federal adult-care home transition issue.
In 2012, Smith and Disability Rights successfully challenged in court Cardinal, then known as Piedmont Behavioral Health, for cutting or ending medically necessary services to more than 130 I/DD recipients without appropriate due process. Much of those services were restored.
“We hope that the new board of Cardinal will be deliberate in searching for experienced leadership with the appropriate values,” Smith said.