Smoky Mountain approves management agreement, Western Highlands to consider it tomorrow

Board members from both Smoky Mountain Center and Western Highlands Network used the phrase “smooth transition” throughout a meeting held earlier this afternoon — an indication that both entities want another two-word expression they used frequently to come true at Western Highland’s meeting tomorrow morning: “seamless process.”

To do this, Western Highlands will need to approve the management agreement that was unanimously adopted by the Waynesville-based managed care organization this evening. The legal document acts as the first step in an eventual merger between the two managed care organizations, which provide mental health, substance abuse and developmental disability services in Western North Carolina.

However, a late afternoon meeting of Smoky Mountain board members reveals that those aforementioned phrases may foreshadow the actions Western Highlands will likely take in less than 24 hours.

“It was planful that Western has a specially called meeting tomorrow morning,” Smoky Mountain Chief Executive Officer Brian Ingaham says, addressing Smoky Mountain board members. “We really want [Western] to follow on the heels of our endorsement of this.”  Looking at Western Highlands interim CEO Charlie Schoenheit, Ingaham adds, “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.

The partnership with Smoky Mountain comes nearly a year after a 10-page report revealed Western Highland’s multi-million debt last July. The almost $3 million shortfall ultimately resulted in the loss of Western Highlands’ Medicaid contract with the state. Consequently, the Asheville-based organization underwent a series of changes — from restructuring its budget to restructuring its administration. But in April, the board reached a unanimous decision to partner with Smoky Mountain Center, citing the importance of having a presence in Western North Carolina.

Smoky Mountain currently provides mental health, substance abuse and developmental disability services to 15 counties. With the addition of Western Highland’s coverage area — Buncombe, Henderson, Madison, Mitchell, Polk, Rutherford, Transylvania and Yancey — Smoky Mountain’s coverage would expand to 23 counties.

However, 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, 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 submitted a request to the state’s Division of Medical Assistance, the N.C. Department of Health and Human Services has agreed to extend its DMA contract termination date from July 31 to Sept. 30.

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

Also as a result of the document that outlined Western Highlands transition with Smoky Mountain, the state approved Western Highlands’ request to enter into an agreement with Smoky. Consequently, the board will provide a weekly transition update to DHHS. However, the organization was denied its request for an additional $400,000. The money was what remained from the nearly $2 million Schoenheit estimates the transition will cost Western Highlands.

In the meantime, Ingraham stresses, the focus will be on what lies ahead, particularly the day after Western Highlands’ contract with the state expires.

“Now we have that stake in a ground for Oct. 1, that becomes very clear. Obviously a lot has to happen between now and then, and that’s what the management agreement is about,” he says, adding, “But there’s going to be another very important agreement: the merger agreement.”

In many ways, this statement at the evening meeting of the Smoky Mountain board echoes the statement he made earlier today at a joint meeting between Smoky Mountain and Western Highlands:

He said, “We’re very intent on getting the management agreement signed, sealed, delivered.”

— Caitlin Byrd can be reached at cbyrd@mountainx.com, or 251-1333, ext.140.