New mental merger raises questions for Buncombe


By Leslee Kulba-At Tuesday’s meeting of the Buncombe County Commissioners, Assistant County Manager Mandy Stone presented what she referred to as “advocacy issues” pertaining to the impending merger of Western Highlands with the Smoky Mountain Center. Stone said Smoky Mountains will “run the delivery system” for Western for the remainder of the year, after which a new, merged entity will oversee mental health in the western part of the state.

First of all, Stone wanted to share the fact that a $6 million shortfall in Western’s budget had been corrected, and the organization now has on-hand a $7 million surplus. The surplus, she said, involved no cuts to client services but was obtained largely by increases in state per capita allotments and streamlining of overhead. In answer to a question from Commissioner Joe Belcher, Stone said the surplus was applied to the risk reserve that the state requires LME’s to maintain of at least 15 percent of their operating budget. Any surplus beyond that could go toward innovating programming to address local needs. Stone, who serves on Western Highlands’ board, said leadership wanted to do the responsible thing and make the organization as healthy as possible before the merger.

Since job creation is at the forefront of the commissioners’ minds, Stone assured them that of the 457 employees at Western, all but 36 were retained. Those who left either retired or elected not to participate in the placement program. Western provided about 200 jobs in Buncombe County. The new LME will continue to provide those jobs with the potential for creating more.

Stone’s concern was that Buncombe County might get lost in the merger. Smoky Mountains manages mental health services for counties to the east and west of those Western Highlands served. Following the merger, 23 counties will be under one LME; and there are substantial rumblings about another 12 joining.

The problem with that, said Stone, was that Buncombe County’s population is at least twice that of any other county in the LME. It furthermore is more urban in character than any other county. Home to Asheville, Buncombe County has problems with homelessness and vagrancy among the dually-diagnosed. Jail diversion programs have only increased the number of mentally ill on the streets. Due to the range and quality of available services, Asheville has become a magnet for those seeking recovery. The City of Asheville’s disproportionate number of calls for emergency services continues to be a hot topic during budget discussions.

Stone’s argument was that any of the rural counties could speak for the others, but Buncombe needed representation on the new LME’s board. As it stands, state law has capped the number of seats on the board to 21. Answering Chair David Gantt, Stone said the limit is intended to prevent boards from becoming ungainly and unproductive. Should the 35-county merger occur, however, the LME would exceed the 1.2 million population threshold established by Sessions Law 2013-85, and thus have leeway to modify its governance structure. Stone implored those present to use their pull to make sure Buncombe would have a seat at the table.

History –

Back in April, a special bulletin was circulated by the fiscal agent for the North Carolina Medicaid Program. It announced the NC Department of Health and Human Services would be terminating its contract with Western Highlands for administering the state’s Medicaid waiver program. Western Highlands had been acting as a Local Management Entity (LME), overseeing Medicaid Section 1915(b) and (c) waivers. The waivers allowed states an opportunity to pilot programs for administering Medicaid products and collecting payments. Western Highlands managed services for persons afflicted with mental illness, developmental disabilities, and substance abuse problems in eight WNC counties, including Buncombe. The termination date would be July 31.

This came as a rude awakening to the board of directors for Western Highlands, who opined the state was playing shock and awe with a decision that must have been brewing behind the scenes for some time. While aspersions have cast the decision as having roots in the mad, tyrannical tantrum of the state’s new Republican majority, the story begins in July of 2012. That was when Western Highlands’ board learned a $3 million budget shortfall had been covered up.

Western’s CEO was swiftly fired, and the CFO and medical director retired in lieu of experiencing a similar end. Chief Operating Officer Charles Schoenheit stepped up to the role of interim CEO during an executive search. The search went dry, as no qualified applicant would accept the position without perks that are forbidden by state law, such as relocation expenses and severance pay.

While dangling with only a skeleton management crew, the organization contracted with turn-around consultants. Adding insult to injury, the consultants practically quadrupled the $250,000 tab for which they initially contracted. Consultant Mary Thornton argued the organization was more “fragile” than she had been led to believe; and employees, more resistant to change. The state then asked Mercer Government Human Services Consulting to assess conditions at Western Highlands. Mercer reported twenty significant findings of fault in the organization’s accounting practices, and the writing was on the wall.

Western Highlands assumed a leadership position during the last wave of mental health reform in 2004. It replaced Buncombe County’s Blue Ridge Center, the Rutherford-Polk Area Program, and the Trend Area MH/DD/SA Area Authority. The reforms followed legal decisions that persons with mental disabilities fared better when mainstreamed in the community than being holed up in institutions. The new program was not received warmly, eliciting comments like the famous one from former Henderson County Sheriff George Erwin, referring to the reformation as mental health “deformation.”

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