Thursday, May 17, 2007

HOW ALL ENDORSED PROVIDER COMPANIES ARE AFFECTED: state auditor report re: collapse of New Vistas/ Mountain Laurel Endorsed Provider in Oct, 2006

Marsha V. Hammond, PhD: Licensed Psychologist, NC
Asheville, NC
Fax: 828 253 2066 cell phone: 404 964 5338 e mail:

May 17, 2007

RE: NC State Auditor report on New Vistas/ Mountain Laurel collapse in October, 2006: 10,000 lives provider associated with Western Highlands LME

Dear Governor Easley; Lt Governor Perdue; Mike Moseley (MH); Carmen Hooker Odom (DHHS); (DMA); Attorney General; NC NAMI; Western Highlands Board of Directors; colleagues and state legislators:

I would like to make some formal comments associated with the NC auditor’s report on the matter of the collapse of New Vistas/Mountain Laurel (NVML) Endorsed Provider company. I have never been affiliated with that company. I do live in Buncombe County and am thus quite aware of the effect this has had upon the community of citizens as well as the community of providers. I am speaking to this matter as a licensed psychologist who has overseen the providing of Community Support, the creation of Service Plans, and a significant amount of knowledge about how mental health reform has played out, so far, in NC.

I would like to first of all make the point that what has taken place as associated with that Endorsed Provider is simply the matter ‘writ large.’ All other Endorsed Provider companies and thus all providers of mental health care in NC have suffered the same problems. At the end of this letter, I would like to propose some possible solutions.

It was a quality audit, unlike the DHHS audit on Community Support providers. As pertaining to the DHHS April, 2007 Community Support audit, DHHS personnel have refused to answer my questions about the methodology associated with that audit which utilized four criterion, all weighted the same, which are all quite different in terms of time utilized by Community Support Endorsed Providers. In that DHHS audit, ‘Service Plan’ was given the same weight as ‘Authorization’(which is nothing but a signature). A ‘Service Plan’ is a very time-consuming venture, taking place between the Endorsed Provider and the client as well as significant others associated with the client. The usual amount of time consumer is 10-15 hours. I am positing that the methodology is unsound and the results are therefore dismissable. This means, essentially, that there is no basis for the defunding of Community Support.

In any case, returning to the matter of the NC auditor’s report: the auditor interviewed a range of impacted individuals over 2-3 months in order to gather his data points. New Vistas, which combined with Mountain Laurel (NVML), under Western Highlands LME, was noted by the auditor as having continued with ‘business as usual’, as they began to move forward, in fact wisely taking advantage of their connections within the community. Financial stability linked to state-funded mental health clients, a problematic matter. These clients, the auditor noted, necessitate ‘double’ authorizations, a matter which is time-consuming for both the Endorsed Provider company as well as the LME. Additionally, the amount of work per state funded client is the same in terms of Service Plans (as mentioned above) and the allowed services is much, much less than for Medicaid/ Medicare clients. Thus, the Endorsed Provider works hard to put together the services and receives minimal compensation in return.

In the beginning, as mental health reform created Endorsed Provider companies across NC, New Vistas was viewed and mandated to be a ‘safety-net’ provider, and so they continued to see clients who were non-revenue-making, such as state clients (non-revenue making also refers to the problem with the ‘double’ authorizations as associated with state-funded clients). Additionally, there was no emergency psychiatric facility to take state-funded clients save Broughton Hospital, two hours out of Buncombe County. Children are not taken there. Contrarily, Smoky Mountain Center LME, has utilized The Balsam Center, located in Haywood County, for this purpose. In the eastern end of the state, indeed, the psychiatric facilities have been closed. Testifying to the difficulty in keeping these emergency psychiatric centers up and running, I am advised by Doug Trantham, the Director of Services at the Balsam Center, that it has been very difficult to keep services available due to lack of funding by the state and shifting of funding mandated by the state. A year or so ago, The Balsam Center was ready to go ahead with a children’s psychiatric in patient center but then DHHS shifted the funding which pulled the rug out from under this. Adding further to the burden borne by The Balsam Center, until recently, no Medicaid/ Medicare client could stay at Balsam Center, but only state funded clients (paying less money as per funds). This was undermining of the functioning of that emergency psychiatric center. There continues to be NO child psychiatric emergency services. Instead, Western Highlands LME thought it better to have one company which has provided mobile crisis care. This has not worked well as one company does not sufficiently provide the range of services which is necessary.

The auditor outlined major revenue stream loss as associated with no-shows by clients associated with appointments with providers within NVML. The auditor did not address the difficulty with transportation or child-care. He simply noted that they did not come in for appointments. To underline this matter and what has not been done in order to address it, when the Smoky Mountain Center LME had its provider meeting on May 12, 2007, administrators further underlined that no Community Support monies could be used for transportation of clients to necessary meetings. Thus, the Endorsed Providers are expected to bear this expense without compensation or even acknowledgement by the auditor that this is perhaps problematic.

The auditor acknowledged that DHHS implemented Service Definitions in March, 2006, as a key factor associated with confusion within NVML. Having been a recipient of this, I can testify to the difficulty of attempting to ‘read between the lines’ of DHHS Service Definitions and their memos which go out to providers via the LME’s. As associated with those specific Service Definitions of March, 2006, DHHS first put them out as salient and usable to providers, then DHHS put the Service Definitions on hold, leaving providers with no ability to plan treatment, pay employeed, or maintain their businesses.

The auditor goes on to speak about the critical matter of ‘insufficient operating capital’ as re: NVML. I find this puzzling when I am advised that LME’s will be sending back millions of dollars in un-used funds to the state. This causes the state legislature to assume that since they are sending money back, they must not need it. I am informed by Bill Hambrick, administrator at Smoky Mountain Center, that the funds are being sent back as associated with the inability to find providers to do the work that has been mandated per the Service Definitions by DHHS. As pertaining to NVML, job stressors began to effect the very functioning of the company. As the Service Definitions became an unknown factor in terms of what would be paid for---with DHHS putting them out and then putting them on hold----employees began to look for other jobs. This snowballed into many people looking for other jobs.

These are my recommendations as re: the above matter which I believe I understand at least as well as most Endorsed Provider companies associates (which is what I am):

1. Give the LME’s a block of money and allow them to use it as they find necessary as associated with mental health care needs in their catchment area. This is also in keeping with earlier assumptions that this is what was going to take place. This addresses the matter of ‘double authorizations.’ DHHS would be useful in a role as organizer of information. However, what appears to have taken place is that not only has DHHS attempted to do this, and has done it badly, but they have attempted to mandate pockets of money and authorizations which was not in accord with their knowledge base of what the communities needed. Include funding for the care of state-funded clients within that block of money. This will also circumvent the return of monies to the state, causing the state legislators to assume that since the money was not used, no additional legislation associated with funding is necessary.

2. Fund and create emergency psychiatric services throughout the state, paying particular attention to the lack of child psychiatric services which has caused consumers’ parents to have placed their young children in other states for care.

Sincerely and respectfully,
Marsha V. Hammond, PhD: Licensed Psychologist, NC


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