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Rule change will consolidate mental health in WNC

The state agency in charge of implementing new mental health rules this year says those changes will save money and improve quality, but some providers see it as a knee-jerk reaction that will limit access to services and put people at risk.

The Department of Health and Human Services has announced an overhaul of its mental and behavioral health model that will consolidate the state’s network of providers in six months.

“The biggest problem is they’re trying to implement sweeping changes across the system and they’re not giving us time to do it,” said Raymond Turpin, CEO of Jackson/Haywood County Psychological Services.

Turpin and other local behavioral health providers are concerned that the new program, dubbed the Critical Access to Behavioral Health Agency or CABHA, will put small providers out of business in the short run and threaten the stability of the provider network long-term.

CABHA is designed to create a new set of standards and requirements for behavioral health providers that use state and federal mental health funding. The range of services from providers include substance abuse counseling, crisis intervention, psychological assessments, and treatment for mental health issues like depression.

Under the new rules, mental health service providers must have a full-time psychiatrist on staff, national accreditation, and take on additional administrative duties in order to bill through Medicaid — which are tall orders for a small office of counselors.

Whether it succeeds in improving the quality and integration of services, CABHA will most certainly instigate a rapid consolidation of the provider network in a short time frame.

“The environment is going to become more and more harsh for smaller providers,” said Brian Ingraham, CEO of Smoky Mountain Center, the local management entity that oversees mental health services in WNC. “The state is clearly going in the direction of larger consolidated providers.”

 

Streamline or rollback?

When CABHA is introduced in July, many small providers who aren’t able to meet the program requirements will not be able to bill Medicaid-funded services, forcing them to close, contract with other companies, or lay off staff.

Marcia Lewis –– executive director of Mountain Youth Resources a provider of mental health services that contracts with Macon County Schools –– runs one of the small providers that stands to lose as a result of the changes.

Lewis said her agency could potentially join up with one of the new CABHAs, but is in limbo until the state makes key decisions about how providers will be reimbursed, from what type of services are eligible to the hourly billing rate. Until then, there is no way for companies to create a new business model.

“My own personal view is the state is reacting to things without thinking them through and without determining how they’ll operate and in the meantime clients will suffer,” Lewis said.

Lewis said the CABHA program will add another level of bureaucracy to the service delivery system and create a new layer of costs.

“They keep adding levels of cost instead of levels of service,” Lewis said.

Lewis’ complaint gets at the philosophical debate underpinning the current changes. During the state’s 2003 reform effort, the implementation of community support services was a wide-ranging attempt to offer people in need of behavioral health services more contact with their providers.

The community support model failed. But while the providers that billed for community support agree that its cost spiraled out of control, they also maintain that the state’s poor implementation of reform deserves the lion’s share of the blame for its failure.

“North Carolina was moving so fast that we were being pushed to implement services even before the service definitions were set,” Turpin said.

Turpin said his agency spent big money bringing in state-mandated trainers who couldn’t even explain what types of services community support would cover. He fears the newest round of changes will be managed the same way, preferring a political mandate to the reality on the ground.

Either way, with the General Assembly ordering the department to kill community support by July, systematic change is a political reality.

“The time frames are what we have to deal with,” Watson said. “We’re operating with specific direction from the General Assembly to phase out community support by June 30.”

So far the DHHS has gotten letters of interest from 200 providers who want to establish CABHAs and 20 full applications. Ingraham said he thinks the state will end up with around 100 CABHAs, and only three or four in WNC.

Turpin said the rapid consolidation will hit rural areas hardest, because many people who need services won’t know where to go to get them.

Watson acknowledged access could be an issue initially.

“There may be some access issues initially and that’s something we’ll have to monitor closely with the LME’s,” Watson said.

Duncan Sumpter, CEO of Appalachian Community Services, a mid-size provider that serves rural Graham, Cherokee, and Swain counties, sees the consolidation as a step back to a model that prioritizes economics over human needs.

“There’s a difference between covering a community and serving a community,” Sumpter said. “As we move back towards consolidation, we may go back to covering instead of serving.”

 

Between theory & practice

Turpin believes the requirement that CABHAs maintain a full-time psychiatrist as an administrator is a deliberate attempt to put rural providers under the gun.

“Now they want to go back to a few huge Wal-Mart agencies and they’re using the psychiatrists as the magic bullet to wipe us out and make room for some national provider to come in and take over,” Turpin said.

Brian Ingraham –– CEO of Smoky Mountain Center, a regional entity that manages the network of private providers –– said psychiatrists are already a scarce resource in the state’s rural areas and shouldn’t be used as administrators.

“The psychiatrists we have now in this part of the state need to be working in a clinical and medical capacity, not in an administrative one,” said Ingraham.

Watson explained that the requirement is intended to create built-in medical oversight in a system that supports medical programs.

“These are Medicaid services and they are supposed to be medically necessary,” said Watson. “With community support you had a program where 90 percent of the providers were high school graduates.”

The difference of opinion over the medical director requirement points to a lack of trust between the state and its provider network.

The state feels it has been burned by providers milking the system. Its providers contend the state never defined its programs in a way they could be administered properly.

Ingraham believes the CABHA program is based on good theory, but he wonders whether the short timetable slated for its implementation will create a new kind of problem.

“The good news is it’s an opportunity to integrate services that really should be bundled under one roof because we are dealing with a fragmented system right now,” said Ingraham.

Not every provider sees CABHA as a threat and most providers agree that the system could benefit from a more regional approach in which services are better integrated.

For instance, under the current system a patient could receive counseling from one agency but their prescription from another.

Joe Ferrara, CEO of Meridian Behavioral Health based in Waynesville, said CABHA could improve the quality of behavioral health services. Ferrara agrees with Watson that the reform effort didn’t work.

“There was a belief that there was going to be collaboration from the providers that would create continuity of care, but it never really happened,” said Ferrara. “The reason community support was removed, let’s be frank, was because the costs associated with it went through the roof.”

But Ferrara also fears that the CABHA program will operate in practice as an unfunded mandate.

“Whenever there are unfunded mandates for the provision of services, the state uses the explanation that they will tweak the rates for the services,” Ferrara said.

The state has promised that the added administrative costs CABHA mandates will be offset by an increased billing rate for case management services, the program that will replace community support.

The state’s budget crisis has created the political reality that those changes must be made by the end of July. In the past year, the state has already cut $40 million out of its mental health system and cuts may be even deeper in the next budget cycle.

With providers strained, the task of overhauling their business models in six months in response to CABHA could force some of them out of business. Even the providers who are well positioned to weather the changes question the wisdom of such a narrow time frame.

“Providers are reeling and all of the sudden they’re going to introduce CABHA and they’re saying the costs will be picked up in the billing rates for case management,” said Ingraham. “Well I really hope so because if not we’ve created a big mess. There’s a lot of risk there.”

 

The road ahead

At the root of the debate over CABHA is a discussion about winners and losers. Some middle-sized behavioral health service providers stand to grow as a result of the consolidation. At the same time, the regional entities like Smoky Mountain Center that oversee the network of private providers will lower overhead costs by dealing with fewer agencies with better built-in oversight capacities.

Meanwhile though, in Western North Carolina’s rural areas, the people who rely on services will almost certainly face a reduction in service hours and some will likely deal with an interruption in services. In addition, some service providers will likely go out of business entirely.

In the seven western counties, three existing service providers have already begun the process of applying for CABHA certification –– Haywood and Jackson County Psychological Services, Meridian Behavioral Health, and Appalachian Community Services.

All three businesses were created by former employees of the Smoky Mountain Center when the provider network was privatized during the 2003 reform effort.

Now those businesses and many others are facing competition with national providers and forced consolidation.

“It’s just one more change in a stream of changes along the timeline,” Ferrara said. “This is an incredibly difficult time to be providing behavioral health services in North Carolina.”

Missed deadline costs HRMC potential revenue

Haywood Regional Medical Center could miss out on as much as $750,000 in revenue over the course of a year after missing a federal billing deadline for its new mental health wing.

The missed deadline, which occurred last fall, was the result of a misunderstanding between the hospital and the federal Medicaid office.

The psychiatric unit is eligible for a higher rate of Medicare and Medicaid reimbursement than other hospital units. To qualify for the higher rate, the new wing had to be visited by state inspectors and get certified.

State surveyors told the hospital to apply for the survey by mid-August of 2008 in order to meet a cut-off date of Oct. 1. If the hospital missed the deadline, it would have to wait a full year for certification that qualifies it for the higher rate.

This is where state surveyors got picky. The surveyors received the hospital’s application for a survey on Aug. 19, “a date which apparently the state does not consider to be mid-August, although two of the four days in question were over a weekend,” explained hospital CFO Gene Winters, who didn’t work at the hospital at the time.

The state told the hospital that its request was four calendar days late — forcing HRMC to wait another year before it can qualify for a bigger return on the psychiatric unit.

The 16-bed unit has been mostly full since it opened in October of last year, thus serving as a steady source of revenue for the hospital, between $250,000 and $300,000 a month if the unit remains near capacity.

The amount of revenue the hospital is missing out on could be as high as $750,000 over a 12-month period until the window rolls around to get the unit certified, Winters said. According to Winters, the true budget impact from the missed deadline will likely be small, around $300,000. The hospital had budgeted for the psychiatric unit conservatively.

“We are in the process of sharing the pain of the reduced revenue with our psychiatric unit management company, so the impact to the hospital will be minimized,” Winters said.

— By Julia Merchant

The new watchdogs: After crisis, hospital board renews emphasis on oversight

Today at HRMC, 10 sets of eyes peer over the shoulders of the hospital administration, ready and willing to question every move.

Though the hospital had a board of directors in place when the hospital lost its Medicare and Medicaid certification a year ago, oversight arguably wasn’t the board’s strong suit. But today, the buck stops with the hospital board when it comes to avoiding another crisis.

In the months following the hospital crisis, it was out with the old, in with the new on the hospital board. The original board members either resigned or didn’t reapply for their terms. A host of Haywood residents, appalled by the hospital’s downfall, were more than happy to step up and play watchdog. When two seats became open in April, county commissioners were flooded with a staggering 37 applications (in contrast, many boards are happy when one person applies). Seven out of 10 sitting board members today are new since the crisis.

The clean sweep will continue in April, when long-time board member and chairman Glenn White will step down and the board is expanded by two. When that occurs, only two out of 12 board members will have been in place under Rice.

“It’s good to have those without experience, because they keep it fresh,” said Cliff Stovall, who was appointed to the board in June. “You don’t want to just do it the way that it’s always been done.”

Board members come from a wide range of backgrounds: a banker, a retired Army colonel, a former district attorney, a nursing instructor, to name a few.

“I think it’s important to have people that aren’t entirely immersed in medicine, because it brings a different point of view,” said Pam Kearney, who also came on board in June.

 

Back to basics

Defining just how the board is supposed to function has been a top priority. Since the crisis, the board has had to do some serious reinforcing of its core mission — overseeing the hospital administration.

“We didn’t have any concept of what the board’s duties were,” said Roy Patton, who became a board member in June. “There had been more or less a structure for the board, but I don’t think that the board had ever learned to use it. The former CEO kept the board pretty much in the dark.”

That’s not the case anymore.

“The board’s role is oversight, and I think we’ve come to realize how much more important that is than we may have realized at one point,” said Patton.

 

In the drivers seat

The revamped hospital administration has made it much easier for the board to perform its duty as watchdog. Former CEO David Rice held a tight grip on the flow of information, so what the board knew about day-to-day hospital activities was limited.

“We asked questions in the past, too, but it’s the answers and responses that you get that are key,” said Mark Clasby, a board member who had served for a year and a half when the crisis hit.

“I think that the board was just somehow lulled into pretty much an acceptance of what Rice said was going on,” Patton said.

Consequently, HRMC’s loss of Medicare and Medicaid certification caught board members completely off guard.

But as the hospital’s culture began to change in the wake of the crisis, so did the relationship between the board and the administration.

“I think the thing that I see changing is that the board members and the administration are actually having dialogue and discussions,” said Kearney. “It’s not a one way street. The communication lines are now open, and board members are not denied access to information.”

Kearney said the board has demanded the larger role.

“I think the board really is driving it,” Kearney said.

Since the crisis, the board has put measures in place to make sure it’s not kept in the dark.

For example, an immediate notification process requires the hospital administration to notify board members of any incident affecting HRMC.

“It allows the board to be in the loop of information from day one,” said Kearney, “so we don’t read about it in the media or find out about it secondhand.”

In contrast, Rice kept such incidents a secret from the board. Board members were unaware of the brewing crisis a year ago that the hospital’s Medicare status was in jeopardy.

Board members also now attend exit interviews when any hospital inspection is completed, which “enables the board to learn firsthand if there are serious patient concerns,” said Kearney. “This was discouraged in the past.”

At a recent exit interview, surveyors even opened up the floor so board members could ask questions — something Kearney recognized as a real turning point for HRMC.

“There was not one person in the hospital who was going to make or break that survey, as was the case in the past,” she said.

Haywood County Commissioner Kevin Ensley, who along with other commissioners appoint the hospital board members, said the crisis should serve as a wake-up call to anyone serving on a board to be more diligent in their oversight. Too often, those at the helm of an organization can lull their board into complacency or charm them into compliance.

“If you tried to remove David Rice two weeks before that happened there would be a firestorm,” Ensley said. “The one good thing that has come out of this is all the boards in the county see you really have to watch what management is doing. We could all point our fingers at ourselves because people weren’t paying attention.”

 

Not afraid to ask

The idea of the board taking the wheel marks a sharp change from before the crisis, when decisions were often made in a unilateral manner by the administration.

“I don’t think that we would now be able to have that same reliance (one the administration),” said Patton. “I think we’re always going to be saying, is this right?”

Today, there is no shortage of questions for hospital administrators at board meetings.

“I can assure you that nobody leaves without getting questioned to the hill,” said board member Cliff Stovall, who was appointed in June. “There’s no timidity on the board. There are no wimps in the meetings I’ve been in.”

Board members hope a renewed emphasis on oversight and open communication will ensure they’ll never again be blindsided, as was the case a year ago.

 

Turnaround?

Though the hospital is still on a road to recovery, board members say there have been some key turning points since the crisis.

Patton says positive change began to take hold right away.

“I think that immediately, when things fell apart, some things started turning around,” he said. “All of a sudden, we had training going on, and more attention to the things that we hadn’t been paying attention to earlier.”

Stovall said one of the board’s biggest accomplishments since the crisis has been getting the hospital’s finances back in the black. The hospital’s lack of debt made this easier, he said.

“We did spend a lot of money just to keep going, but our money did not evaporate,” Stovall said.

Clasby said as of December, the hospital was ahead of its budget for the year — a positive but preliminary sign, since the fiscal year only started in October.

Board members also named the hiring of CEO Mike Poore as a key accomplishment.

“It’s just been a breath of fresh air for us,” Patton said.

Board members expressed mixed sentiments on whether the hospital has overcome one of its greatest challenges: regaining the community’s trust.

Stovall said he views the frequently full parking lot at the hospital as a sign that people are coming back.

“I think that’s an indication that people are using it, so it’s restored confidence,” he said.

Patton was a bit more hesitant.

“I would say yes, there has been some trust regained, but I don’t think that we’re to the point where we can say, we’ve done it now and we can relax,” he said.

Kearney also says there’s work to be done.

“The community sentiment is more positive toward the hospital than a year ago, but we haven’t yet seen a sufficient increase in the daily census,” she said. “I think that’s the only tangible way you can measure that. I would say there are people that are going past Haywood and going to Asheville.”

 

Phoenix rising

The crisis that hit Haywood Regional helped to erase a culture of fear and overhaul the hospital’s administration and practices. So is HRMC better off for it?

“That’s a real difficult question, because you just blew $10 million,” said Kearney. “We spent some of our future, which is unfortunate.”

Clasby says that in the end, HRMC did emerge as a better hospital — though the road to get there was tough.

“It’s a shame and it’s sad that we went through what we did, and it was very painful for the community,” he said. “But we had an opportunity unfortunately to correct the things that were wrong and to rebuild this into an excellent, quality institution. It’s kind of the rising of the phoenix.”

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