Local Politics

Millions of Medicaid Payments Withheld; Report Says Wake Mental Health Badly Managed

Posted April 17, 2008
Updated April 22, 2008

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— Federal Medicaid officials said they were withholding a $175 million payment to North Carolina's mental heath service, while at the same time state officials announced an aggressive, three-year plan to correct inadequacies revealed in an independent evaluation.

The state's mental-health system has struggled for years with problems in patient care and claims of abuse. Many critics blame reforms, signed by Gov. Mike Easley in 2001, that decentralized the system to save money and offer more varied services.

The preliminary evaluation released Thursday found that Wake County Human Services does one of the worst jobs in the state at managing mental-health care for its region.

Wake's performance ranked in the bottom of three tiers among 25 local-management entities (LMEs) rated in three categories: financial and business management operations, information-technology and claims management, and clinical operations and governance.

County officials emphasized that the evaluation looked at management, not the quality of care.

"This report was not about direct services," Ramon Rajono, director of Wake County Human Services, said. "It was about how quickly we pay the bills, how quickly we process the claims."

The Cumberland County Mental Health Center and the Johnston County Area Mental Health, Developmental Disability and Substance Abuse Authority also ranked in the bottom tier of LMEs overall, along with two other agencies.

Eastpointe – serving Lenoir, Sampson, Wayne and Duplin counties – was the only other LME ranked in the lowest tier in all three categories.

Feds Withhold Millions

The federal Centers for Medicare and Medicaid Services announced Wednesday that it will defer a quarterly payment to the state's Community Support Services program. Federal officials cited concerns that the state program has mismanaged Medicaid funds in the past.

CMMS said the withheld payment was $175 million, while the state estimated it at $137 million. A follow-up from the federal agency said the payment may have been over-estimated.

State officials have acknowledged that private providers in the new program overcharged the state or provided poor care, leading to millions in wasted taxpayer dollars.

Although the state Department of Health and Human Services began some corrective action in August, CMMS said it would defer the quarterly payment until the state forms a comprehensive plan of action.

CMMS is "not able to determine the 'good' expenditures from the 'bad' expenditures, resulting in us having to defer the entire amount," a CMMS official wrote in the April 16 notice.

The department's secretary, Dempsey Benton, addressed providers' ability to process Medicaid and obtain national accreditation in a three-year plan to reform the state's mental health-care system. He proposed the plan to a legislative committee Thursday.

The plan would revise the appeals system for Medicaid providers and recipients.

All current Medicaid providers in the system must get national accreditation by 2011. Providers that join the system will have two years to get it.

DHHS officials pointed out they have already imposed a moratorium on new providers and administrative sanctions, such as withholding payments to the state Medicaid program.

Community Support expenses dropped 22 percent from the third quarter of 2007 to the first quarter of 2008, according to DHHS.

Governor Proposes Reform Plan

Benton outlined other mental-health reforms that Easley will try to get passed in the General Assembly this year: centralizing management of the system, increasing funding for state psychiatric hospitals and expanding crisis services.

Benton proposed consolidating the state's 25 LMEs into nine and creating three regional management entities to oversee them. The three-year process to do so would be voluntary and incremental, Benton said.

"At this time, the State-LME arrangement does not meet the general definition of a 'system," Benton wrote in a memo to the legislative committee. "It is more realistically described as 25 separate systems of management."

Managing resources regionally, Benton argued, will encourage cost savings and resource sharing, so that more money can be reinvested into services. The state currently pays $132 million in administrative costs for LMEs.

Benton also recommended increasing funding to increase state oversight of psychiatric hospitals, including more internal inspections.

More workers should be hired to increase staff-to-patient ratios, and recruitment incentives should be offered to get those new workers in the door, Benton argued.

He also proposed that the state budget money for its share of the 60-bed adult admission unit at Dorthea Dix Hospital, which will open in July.

Easley has ordered that local medical examiners investigate all deaths at state psychiatric hospitals. Advocacy groups claim that a lack of planning and coordination with local services has lead to the deaths of discharged patients.

Benton said the governor will ask the state Legislature to expand crisis services by creating a statewide network of 30 mobile crisis teams. New staff positions should be created for walk-in crisis-care centers across the state, and 187 community inpatients beds should be available around the clock.

The full findings of the s independent evaluation will be available in early May while Easley considers which mental-health reforms he will press the Legislature to pass once its short session begins in mid May.

The Mental Health Oversight Committee recently issued its own report, which identified psychiatric hospitals, crisis centers and accountability as areas that need immediate attention.


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  • dragonmum Apr 18, 2008

    This whole situation is a tragedy & a farce! Wake was one of the better area programs. 12 years ago the system, was inadequate, but worked much better than this debacle perpetrated by government clowns. The "reforms" needed to carry a warning "No mental health professionals were consulted in formulating this plan".

    It is patently ridiculous to think that anyone can actually MAKE money and deliver appropriate care to the mentally ill. Cutting hospital beds when there are waiting lines? WHAT?? Cutting case management? Ancillary services? Therapists? Doctors? We need to fund clinical care, not line pockets of greedy criminals preying on other's misery.

    As a MH professional, I'm horrified by this awful mess. Yes, the system needs streamlining; most LME administrators need to be fired!! A large percentage of $ goes to redundant "management". Let professionals, consumers & advocates design the system; we know where we need money & services to best serve our mentally ill population!

  • Adelinthe Apr 18, 2008

    "Report Says Wake Mental Health Badly Managed"

    And the common folks, especially those with relatives in the system, told them this would happen.

    Why don't the hire some of those folks to manage the system??? Those who have been there.

    God bless.

    Rev. RB

  • I like everybody Apr 17, 2008

    I have a close friend who was a social worker and decided to go out on his own offering mental health services. In a few years he has made enough to buy 5 condos, a beach condo, a new home, new expensive vehicles every year for he and his wife. He laughed about the money the state wants back, "what's a couple hundred thousand, i made over a million dollars last year".

  • nic Apr 17, 2008

    I completely agree with howdiditgettothis. It has to do with mamagement of the system. They got rid of Mike Mosley which was a start, but there is a lot more cleaning out to do. The management of the state hospitals all need to be replaced. Their incompetent decisions have created a terrible, unsafe environment for patients and staff.

  • howdiditgettothis Apr 17, 2008

    Sure - more committees are really going to solve the problem.

    The article states the problem is MANAGEMENT not quality of care.

    Don't create more committees. How about cutting down on committees and FIRE the incompentant management running the system????

    Folks.......this ain't rocket science.

  • pbjbeach Apr 17, 2008

    yeah just let the state keep on privitizarting state agencys ( i.e. ncdot as that our highways aren't crumbling fast enough our roads were in alot better shape in the past than they have been for the last 15-17 years since they started to privitize everything i have been expecting to hear of the state letting a contract to wipe the governor's behine . in plain english the taxpayers of this state are being taken to the cleaners through all of this contracting

  • APPMAN Apr 17, 2008

    Money is the reason most state agencies are corrupt. Speaking as a former employee of the NC DOT.

  • krisandbruiser Apr 17, 2008

    the main reason they changed the mental health system was money, pure and simple. Sure, the State has lost millions of dollars, but it is our consumers that have suffered most. They cannot get the services, treatment, safe housing that they need. At least when the counties had their own mental health departments, our consumers had access to all the services and didn't have to wait years to get the services. I am speaking very strongly because I know what this broken system has done. We have a handicapped daughter, and I work for a day program for developmentally disabled adults. I also worked for Mental Health when it was run by the county, so I have had the experience in all phases of this broken mental health reform. Stop putting the money first and concentrate on our consumers. They are the ones who need a system that is going to work.