Western Highlands approves management agreement with Smoky Mountain, takes one step closer to merger

Everything went as planned this morning when board members of Western Highlands Network 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.

As Smoky Mountain’s Chief Executive Officer Brian Ingaham hinted at his organization’s board meeting last night,  “We really want [Western] to follow on the heels of our endorsement of this.”

During a special meeting of the Western Highlands board on Friday morning, May 24, the 15-member board did just that. Currently, the Asheville-based managed care organization provides mental health, substance abuse and developmental disability services in eight Western North Carolina Counties: Buncombe, Henderson, Madison, Mitchell, Polk, Rutherford, Transylvania and Yancey. However, nearly a year ago, it was unknown what would happen to Western Highlands.

Last July, a 10-page report revealed Western Highland’s multi-million debt. The nearly $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. Currently, the Waynesville-based organization serves 15 counties in Western North Carolina.

County manager for Buncombe County and Western Highlands board member Mandy Stone told Xpress, after the morning meeting, that those intentions to keep services close to home and stable guided the board’s decision today.

“For consumers, it [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 had to turn its focus toward its employees, too.

At a May 14 meeting, board members discussed a May 9 memo sent to them from Human Resources Director Rhonda McKee. In that memo, McKee wrote, “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.” At the May 14 meeting, board members discussed the possibility of giving employees a bonus for staying with the organization.

Today, the board shared that they will be able to provide a retention bonus and severance pay for staff. The circumstances are as follows:

1.Western Highlands employees not offered a position with Smoky Mountain will receive a minimum severance payment of $3,500
2.Western Highlands employees offered a position at Smoky Mountain that ensures no break in services will receive a $1,500 retention bonus
3.Western Highlands employees not offered a position with Smoky Mountain and employed for less than a year will receive a $1,500 retention bonus.

The intention, Stone explained, is to give staff members an incentive to stay during the transition, and eventual merger, with Smoky Mountain.  However, Stone said, the new entity may not be called Smoky Mountain or Western Highlands in the future.

“I think that 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,” she said.

For now, the focus will be on getting the management agreement sent to the state for approval. As Ingraham said last night, “We’re very intent on getting the management agreement signed, sealed, delivered.”

The merger between the two entities would result in a regional 23-county coverage area, and could take effect as early as July 2014.

For more information about Western Highland’s journey from local management entity to merger-to-be, read our series of articles on the topic here.

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


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