State approves more money for troubled mental-health agency

Dollar squeeze: Western Highland Network’s interim CEO Charles Schoenheit, right, reported that although the state has stepped in, the organization — which manages mental-health care in the region — isn’t out of the woods yet. Photo by Caitlin Byrd

Western Highlands Network board members got some good financial news for a change on Sept. 24, in the form of more Medicaid funding for the 2013 calendar year.

The state’s offer to increase the “per member per month” rate would mean an additional $11.2 million per year in Medicaid dollars, consultant Diane Bell told board members at a special meeting in Asheville.

Western Highlands connects people who need government services for mental health, developmental and intellectual disabilities and substance abuse with providers of those services. The network covers eight Western North Carolina counties: Buncombe, Henderson, Madison, Mitchell, Polk, Rutherford, Transylvania and Yancey.

In January, Western Highlands became the second local management entity in North Carolina to convert to a managed-care agency, in which local officials manage federal Medicaid dollars funneled through the state. But six months into the new system, the agency made headlines when a multimillion-dollar deficit was revealed and the board fired its CEO.

Answering a question from board Chair Steve Smith, Bell said the revenue boost, plus an increase in the number of Medicaid-eligible residents, would enable the agency to operate in the black — if it were just starting operations now. The 2012 rate, she said, had been set too low.

“This is a pretty good offer,” said interim CEO Charles Schoenheit. “The state did pay attention.”

But the rate increase doesn’t address the agency’s budget shortfall, estimated at $5.6 million for the fiscal year that ended June 30.

“We’re kind of at the brink … financially,” noted board member Steve Wyatt, who’s also the Henderson County manager.

After extensive discussion — including whether the agency should tie its acceptance of the new rate to the state’s making up last year’s deficit — the board decided to separate the two issues.

Accordingly, board members voted 9-4 to accept the new rate for 2013, and then voted 11-2 to ask that the state make that rate retroactive to July 1, 2012 — the start of Western Highlands’ current fiscal year. Those opposed wanted to make the rate retroactive to Jan. 1.

The board also unanimously approved hiring The Richmond Group in Richmond, Va., to conduct the search for a new CEO with a managed-care background. The firm will be paid an estimated $37,500 to $50,000, based on a percentage of the new hire’s salary. — Tracy Rose

MedWest Health System’s future still undecided

The fate of the MedWest Health System remains unknown in the wake of a Sept. 18 resolution by WestCare, a MedWest member, calling for the system’s dissolution. WestCare’s board, representing Harris Regional and Swain County hospitals, said MedWest has failed to achieve the four major objectives it was intended to fulfill: increasing access to health care, reducing the cost of services through improved use of resources, continuing to provide care in a charitable manner and retaining community responsibility for system management. The resolution was adopted on a 13-1 vote.

MedWest Health System was created in 2009 when WestCare teamed up with the Haywood Regional Medical Center. In recent months, however, many doctors have openly expressed their discontent with the affiliation. In a Sept. 19 memo to WestCare’s medical staff, CEO Steve Heatherly tried to address the most recent concerns and the board’s resolution.

"The only path to success for rural hospitals is for alignment between the board, management, staff and medical staff around an unyielding commitment to serve locally every patient it can with the highest quality care, a world-class experience for patients and their families in a highly efficient manner,” he wrote. “As we have been saying for months, this must be our commitment in whatever organizational structure Harris Regional and Swain County hospitals exist.”

Haywood Regional’s board of commissioners met Sept. 22 to discuss the WestCare resolution; no decision was made, though the board appears to be leaning toward sticking with the health system, said MedWest Communication Director Lucretia Stargell.

In order to dissolve the health system, 11 of the MedWest Executive Committee’s 14 members would have to approve it. Harris Regional and Swain County hospitals account for seven seats on the committee; the other seven members represent Haywood Regional.

"There is a stepwise process, but it is no assurance of what is going to happen,” said Stargell, adding, “The MedWest Executive Committee has not given their decision at this time.” —