Care to join us: Western Highlands, Smoky Mountain finalize management agreement

One step closer: Smoky Mountain Center CEO Brian Ingaham listens as board members discuss the details of the management agreement with Western Highlands Network. Smoky Mountain and Western Highlands adopted it unanimously, and the state agreed. Now, both organizations work toward an eventual merger. Photo by Caitlin Byrd

It took less than a month for two to nearly become one.

From a resolution of intent to a signed management agreement, board members from Western Highlands Network and Smoky Mountain Center made swift decisions to make way for a July 2014 merger of the two agencies, which provide mental health, substance abuse and development disability services in Western North Carolina.

However, this accelerated process proved the only option for Western Highlands in recent months, spurred by state officials’ April 5 announcement that they were terminating its Medicaid contract, effective July 31. As the Asheville-based organization's interim CEO Charlie Schoenheit said at the board's April 12 meeting, “We've got a couple of weeks to come up with our plan. We don't have a lot of time to mess around.”

April 25: Intentions known

As the state’s July 31 deadline loomed, its board hoped to keep service management close to home. So rather than merge with an out-of-state or other nonlocal organization, WHN board members voted unanimously April 25 on their intent to become part of Waynesville-based Smoky Mountain Center.

Western Highlands Board Chair Charles Vines called the partnership “a good fit.” He said, “I think it'd be a hard sell to any one of our county managers to convince any of our county boards that they're going to be managed by an MCO [managed care organization] in Durham County, for example," adding, “We chose Smoky for the purpose of making sure we have a presence in Western North Carolina.”

The decision to move forward with Smoky Mountain came after the board went into closed session for a more than an hour, and it aligned with plans presented at the board's April 12 meeting. At that time, the board said it had two options for the agency’s future: pilot an integrated health-care program or merge with another local management entity.

For Smoky Mountain, mergers are familiar territory. Two years ago, New River Behavioral Healthcare board members realized that internal financial difficulties would mean closing the doors; Smoky Mountain absorbed its service area. The merger with Western Highlands will expand Smoky Mountains' coverage area from 15 counties to 23, adding consumers and providers from Buncombe, Henderson, Madison, Mitchell, Polk, Rutherford, Transylvania and Yancey.

May 23: First nod

Board members from both organizations used the phrase "smooth transition" throughout a special May 23 joint meeting — an indication that both entities wanted another frequently used two-word expression to come true the following morning at Western Highland's meeting: "seamless process."

"It was planful that Western has a specially called meeting tomorrow morning,” Smoky Mountain Chief Executive Officer Brian Ingaham said, addressing Smoky Mountain board members. “We really want [Western] to follow on the heels of our endorsement of this.” Looking at Schoenheit, he added, “That's our plan. Then we ship it off to the state and, really, move ahead very firmly.” The document will be effective upon approval from Western Highlands.

Of the nearly 80-page document submitted to the state, Schoenheit said, “It was a difficult process, but I feel pretty good about where we ended up.”

Ingaham says that the emphasis going forward will be on two specific areas: human resources and the transition from management agreement to merger. In a May 9 memo sent to Western Highlands board members, from Human Resources Director Rhonda McKee writes, “We are in a critical situation with maintaining the staff necessary to continue operations at WHN. We have had seven staff resign since the announcement of the waiver termination.” To meet this challenge, the organization plans to pay its staff a bonus by July 31 or Sept. 30.

Originally, July 31 coincided with the termination date of the state contract. However, after Western Highlands requested an extension from the state's Division of Medical Assistance, the N.C. Department of Health and Human Services. They’ve moved the contract-termination date to Sept. 30.

May 24: Second nod

Everything went as planned on the morning of May 24 when Western Highlands board members unanimously adopted a management agreement with Smoky Mountain Center — making the legal document effective immediately and the eventual merger between the two entities ever closer.

After the meeting, Buncombe Assistant manager and Western Highlands board member Mandy Stone told Xpress that keeping services close to home and stable guided the decision.

“For consumers, [the management agreement] really assures consistency for them in that the actual management of the state Medicaid dollars and services move to Smoky, that the contracts with providers are honored and that consumers are automatically enrolled,” Stone said. “For them, it's assuring consistency of services while we move through the merger processes.”

But Western Highlands has also had to turn its focus toward its employees, who will receive a retention bonus or severance pay, depending on various scenarios:

• Western Highlands employees not offered a position with Smoky Mountain will receive a minimum severance payment of $3,500.

• WHN employees offered a position at Smoky Mountain that ensures no lapse in services will receive a $1,500 retention bonus.

• WHN employees not offered a position with Smoky Mountain and employed for less than a year will receive a $1,500 retention bonus.

The intent, Stone explained, is to give staff members an incentive to stay during the transition with Smoky Mountain. She also mentioned, “Both boards believe we will have a new identity and a new name. We both think that a new entity stands up that is representative of the two versus any one.”

May 29: State approval

The week following the unanimous adoption of the management agreement from both Western Highlands and Smoky Mountain boards, the state approved the transition too.

“While the management agreement is the first step in our partnership, DHHS has asked that we work to develop our consolidated organization by July 1, 2014,” Vines said in a May 23 statement released to the media.

In that same statement, Rick French, chair of the Smoky Mountain Center Board of Directors, added, “Now that we [have] the approval of DHHS to move forward, and have this key milestone set, we can really begin the work that will be needed among staff and the boards to establish the structure for a new entity to serve the 23 western and foothills counties of North Carolina.”

Going forward, the two organizations will work toward the next deadline: Oct. 1, the day when Smoky Mountain assumes Western Highlands' Medicaid contracts.

As Vines said back in April,  “If everything is done like it's supposed to be done, and I anticipate that it will, there should not be any lapse in services.”

— Send your health-and-wellness news and tips to Caitlin Byrd at or, or call 251-1333, ext. 140.


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