Car­di­nal In­no­va­tions has seen big changes – and is brac­ing for more

The Charlotte Observer (Sunday) - - Encore - BY JIM MOR­RILL jmor­[email protected]­lot­teob­

It’s been just over a year since new man­age­ment ar­rived at Car­di­nal In­no­va­tions, a Char­lot­te­based health care group whose ex­trav­a­gant spend­ing and in­flated salaries led to an un­prece­dented state takeover.

“In the past year, we’ve learned some hard lessons and made big changes,” CEO Trey Sut­ten said in a re­port mark­ing the an­niver­sary.

Car­di­nal is the largest of seven N.C. or­ga­ni­za­tions that over­see treat­ment of peo­ple with men­tal health is­sues, de­vel­op­men­tal dis­abil­i­ties and sub­stance abuse prob­lems. Known as Lo­cal Man­age­ment En­tity/ Man­aged Care Or­ga­ni­za­tions, or LME/MCOs, they con­tract with the state’s De­part­ment of Health and Hu­man Ser­vices to serve some of North Carolina’s need­i­est res­i­dents. Car­di­nal, which over­sees treat­ment pro­grams in Meck­len­burg and 19 other coun­ties, had a 2018 bud­get of $853 mil­lion.

Car­di­nal still has its crit­ics. It also faces big chal­lenges in North Carolina’s chang­ing health care land­scape. Last month the state an­nounced the start of an ef­fort to move all its 2.1 mil­lion Med­i­caid re­cip­i­ents into pri­vately run man­aged care pro­grams. Car­di­nal even­tu­ally will have to com­pete with pri­vate com­pa­nies.

But some say they like the changes they see at Car­di­nal a year af­ter get­ting a new board and new man­age­ment.

“I see the or­ga­ni­za­tion be­com­ing more well­grounded in their core mis­sion,” says for­mer Sen. Tommy Tucker, a Union County Repub­li­can and fre­quent critic of the old Car­di­nal. “They also re­al­ize that they con­tinue to be un­der a mi­cro­scope from the pub­lic and DHHS. So they’re do­ing ev­ery­thing they can to make the right moves.”

Tucker was among the ear­li­est crit­ics of Car­di­nal and its then-CEO Richard Top­ping over what they saw as ex­ces­sive costs.

The crit­i­cism ac­cel­er­ated in May 2017 when state Au­di­tor Beth Wood is­sued a re­port de­tail­ing Car­di­nal’s “un­rea­son­able spend­ing” that in­cluded two tax­payer-funded re­treats at a lux­ury Charleston ho­tel that cost a to­tal of $133,155, with a $2,127 bar tab. There was also an $18,000 Christ- mas party, in-state char­ter flights for ex­ec­u­tives and tens of thou­sands of dol­lars in ques­tion­able credit card pay­ments.

The au­dit iden­ti­fied $1.2 mil­lion in unau­tho­rized salary to Top­ping. In 2017 he made $635,000. His ben­e­fits in­cluded an an­nual $12,000 car al­lowance, pay­ment for gas with the com­pany credit card and monthly car de­tail­ing.

In Novem­ber 2017, Car­di­nal’s old board fired Top­ping and paid him and three other ex­ec­u­tives $3.8 mil­lion in sev­er­ance. That’s when DHHS came in, fired the board and took over the Char­lot­te­based or­ga­ni­za­tion.

“The cul­ture starts at the top with lead­er­ship,” DHHS Sec­re­tary Mandy Co­hen said at the time. “Ob­vi­ously we went into Car­di­nal be­cause we saw a pat­tern of con­tin­ued non­com­pli­ance with the law.”

A new state au­dit re­leased cited the ear­lier spend­ing, say­ing DHHS con­tracts with LEM/ MCOs like Car­di­nal have failed to de­fine what costs were “un­rea­son­able.”

Mean­while, Sut­ten, 42, said he’s tried to change what he calls a “cul­ture of fear” where em­ploy­ees felt con­strained by ad­min­is­tra­tors. “I would say by and large it’s gone,” he told the Ob­server. “I think there was a cul­ture of fear where folks weren’t push­ing back, weren’t ask­ing ques­tions, weren’t shar­ing their per­spec­tive. ... What I and the rest of the ex­ec­u­tive team are push­ing for is the best idea wins.”

Three law­suits stem­ming from the 2017 con­tro­ver­sies are still pend­ing in court.

Doug Sea, who has rep­re­sented Car­di­nal clients as an at­tor­ney with the Char­lotte Cen­ter for Le­gal Ad­vo­cacy, said he’s seen a dif­fer­ence.

“The cul­ture is dif­fer­ent,” he said. “They have some new peo­ple that seem more com­mit­ted to pa­tients as op­posed to fund bal­ances. Start­ing from that base­line, there’s no ques­tion that they’ve im­proved.”

Paula Yost dis­agrees. She’s a lawyer who chairs the Cabar­rus County Child Pro­tec­tion and Fa­tal­ity team, a group of pro­fes­sion­als fo­cused on child wel­fare. She be­lieves even un­der new lead­er­ship, Car­di­nal has as­signed chil­dren the wrong level of care, pos­ing a risk to the child as well as to the com­mu­nity.

“Ev­ery­thing about it is a mess,” she said of Car­di­nal. “They’re grossly un­der-serv­ing peo­ple.”

Sut­ten said the dis­pute with Yost stems from dif­fer­ent clin­i­cal philoso­phies: What level of care is best for the child? He ac­knowl­edges that Car­di­nal could strengthen its net­work of ser­vice provid----

ers but said state bud­get cuts have made that harder.

Co­rye Dunn, direc­tor of pub­lic pol­icy for Dis­abil­ity Rights N.C., said there are still sys­temic prob­lems in pro­vid­ing ap­pro­pri­ate care. She said she’s con­cerned about fix­ing those ahead of the sys­tem’s whole­sale pri­va­ti­za­tion.

DHHS has awarded five health in­sur­ance or­ga­ni­za­tions con­tracts to­tal­ing $6 bil­lion a year to pro­vide health care un­der a pri­va­tized state Med­i­caid pro­gram. The Gen­eral Assem­bly au­tho­rized the switch to man­aged care in 2015 as a way to con­trol ris­ing costs. The new pro­gram will be­gin phas­ing in in Novem­ber.

About 500,000 of the 2.1 mil­lion Med­i­caid pa­tients, those with more se­vere men­tal or phys­i­cal dis­abil­i­ties, will con­tinue to need care from groups such as Car­di­nal. Those groups will cre­ate “tai­lored plans” that take re­spon­si­bil­ity for a pa­tient’s over­all health. Sut­ten said Car­di­nal will have to ex­pand its reper­toire of ser­vices to in­clude pre­scrip­tion ben­e­fits and other health care needs.

That change is still a cou­ple of years away. And for four years af­ter that, LME/MCOs such as Car­di­nal will have the play­ing field to them­selves. In 2025, other non­prof­its will be able to com­pete.

For Sut­ten, that’s a chal­lenge. “We’ve got to get faster, we’ve got to get bet­ter,” he said.

DIEDRA LAIRD [email protected]­lot­teob­

Trey Sut­ten is CEO of Car­di­nal In­no­va­tions, the largest of seven N.C. or­ga­ni­za­tions that over­see treat­ment of peo­ple with men­tal health is­sues, de­vel­op­men­tal dis­abil­i­ties and sub­stance abuse prob­lems.

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