Most Mental Health Management Organizations to See Additional Trim

August 4, 2017 | By Rose Hoban

Even as North Carolina’s mental health management organizations are adjusting to cuts to their budgets ordered in this year’s state budget, most of the organizations experienced another trim Thursday.

That was the day that legislators came back to Raleigh for what was originally billed as a one-day session to override gubernatorial vetoes. But not enough members of the majority made it to the capital, so instead the session became about passing up some unfinished bills from the regular session and making adjustments to the state budget.

Included in House Bill 770, approved by both chambers on Thursday, was a provision cutting $4.8 million in recurring funds, plus $2.5 million in one-time funds from six of the state’s seven mental health management agencies over the next two years. That money will be transferred to Partners Behavioral Health Management, the seventh of the state’s management organizations.

Partners manages mental health services for people in eight counties in the foothills of the Appalachians stretching from the South Carolina to the Virginia borders. According to Medicaid head Dave Richard, from the Department of Health and Human Services, when lawmakers made funding cuts to all seven mental health management organizations (known as LME/MCOs), they miscalculated and cut too much from Partners’ budget.

So they had to make it up by taking money from other agencies.

“The legislature made the calculations on how they would do that cut,” Richard said. “Partners alerted us, I think a week and a half ago, that was the case and they had been in conversations with the General Assembly.”

Adjustments on top of adjustments

Richard said people from DHHS have been helping all of the LME/MCOs adjust to this year’s cuts.

“The department’s position will continue to be that you have to follow the law,” Richard said. “Obviously, we want to have the least disruption as possible for populations as you’re following that law.”

He said he’s been encouraging LME/MCOs to find creative ways to address the cuts they already have and will have to encourage more creativity to adjust to the new trims.

“The Governor’s budget was pretty clear about what we thought about those reductions,” Richard said, “to restore all of them and use some of that restoration to actually leverage additional federal money to address some of the waiting list issues around developmental disabilities.”

He said his agency had nothing to do with making these further cuts.

“We assumed it was something that would happen, but didn’t have specifics of what the formula would look like and what the changes would be,” Richard added.

Legislative leaders said the need for the adjustment was the result of a miscalculation. Cary Republican Rep. Nelson Dollar grimaced when asked about the additional cuts.

“It was truly a technical adjustment,” Dollar said. “It may not feel technical in the field because you’re moving money around, but it was miscalculations that were done in the allocation.”

He explained there was a per person formula that guided legislators’ calculations, and someone made an error.

“I’m sure everybody will be understanding… well, understand that those things happen, that we have to make adjustments,” he added.

Already tight

But Leza Wainwright, from Trillium Health Resources in the eastern part of the state, said it was a problem for her agency.

“We have already issued our contracts for the fiscal year based upon the budget enacted by the General Assembly on June 28 and our budget was already extremely tight,” Wainwright wrote in an email.

“Our board is still pondering how to deal with the previously approved level of reductions in terms of our planned reinvestments and this will just make those decisions that much more difficult.”

She also said her agency had not yet received the first month’s funding of the money they were allocated, “so this additional drain on reserves makes cash flow even more challenging.”

House Speaker Tim Moore (R-Kings Mountain) said there was an outcry about the fairness of one agency receiving a larger per capita cut than others. When asked whether it mattered that Partners covers Cleveland County, Moore’s home base, he said that didn’t factor into the decision.

“I can tell you this that if that had happened in eastern North Carolina I’d be one of the first in line saying, that needs to be fair,” Moore said.