CenterPoint moving forward with merger plans

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WINSTON-SALEM, N.C. — CenterPoint Human Services is moving forward with plans to merge with two other managed care organizations in hopes of influencing health officials overhauling the state’s Medicaid program.

Employees with CenterPoint, Partners for Behavioral Health Management and Smoky Mountain Center were updated on the merger plans Monday in a one-page memo.

CenterPoint oversees mental health, substance abuse and developmental disability services for more than 70,000 eligible Medicaid recipients in Davie, Forsyth, Rockingham and Stokes counties.

The primary MCO goal is combining the management of Medicaid and state funds at the community level, in a manner similar to an insurer, to reduce costs and add more accountability and consistency to reform.

There have been discussions about a potential merger for at least two months that would combine 35 counties and form an agency stretching from Cherokee to Rockingham.

“From this partnership, it is anticipated that an eventual new entity will emerge which will build from the current, strong operations of the three organizations,” according to the memo.

“Corporate form, governance, location, leadership and staffing decisions are all real and challenging considerations that will be addressed at the appropriate time. Presently, all options for those key decision points are considered on the table.

“While there is currently no specific timeframe for MCO merger, this exploration is consistent with the continuation of Medicaid reform as proposed by the governor.”

CenterPoint has 189 fulltime and 19 part-time employees, of which 122 were hired in the past year as part of its MCO transition. Partners has 325 employees. The workforce for Smoky Mountain was not available.

The impetus for the MCO merger is Gov. Pat McCrory’s plan, announced in February, of putting three to four for-profit companies or nonprofit agencies in charge of all aspects of the state’s $13 billion Medicaid program — physical, behavioral, dental and visual — by July 1, 2015.

For example, Blue Cross Blue Shield of N.C. could apply to serve as a statewide group, but it would have to create a behavioral health division to do so.

The state Medicaid program serves more than 1.5 million residents, most of whom are poor children, older adults and the disabled. Health Secretary Aldona Wos is expected to present the plan to the General Assembly on March 17.

The western region would have an eligible Medicaid population of 392,125, covering a quarter of the state.

The sense of urgency about merging comes because agencies have two options: wait to see if they can perform subcontracting business for one of the statewide providers; or try to persuade Wos to keep a public-management niche for behavioral health.

The potential MCO merger carries several challenges and consequences, including:

u Assuring that local patients will continue to receive appropriate behavioral health services through such a large MCO.

u Determining who would run the merged MCO and the location of its headquarters would play a pivotal role in which agencies experience the largest job losses; and

u Ensuring there will be local oversight, including at the county commissioner level, given it’s likely Forsyth would not have six appointees (as it does now) to the merged MCO’s board of directors.

Ron Norwood, CenterPoint’s chairman, has said the MCOs are working to present Wos with a proposal before February that outlines their case. There are currently 10 MCOs, although MeckLink (covering Mecklenburg County) is expected to merge with Cardinal Innovation, the state’s largest MCO.

“DHHS supports the western MCOs working toward a more sustainable system,” Ricky Diaz, the division’s communications director, said in a statement.

Rhett Melton, Partners’ chief executive, said the combination of the three MCOs would make them more efficient and consistent with providers in which they have oversight and with hospitals that two or more serve.

“We believe the MCO system, as currently configured, addresses a lot of the historical concerns with Medicaid and accomplishes the goal of providing services as best we can to the consumer as close as we can,” Melton said.

Forsyth commissioner Dave Plyler said he would like CenterPoint officials engaged with local advocates and the Forsyth legislative delegation on the proposal “because the future of our citizens will depend on informed and sensitive leadership.”

“Leadership from DHHS and the governor’s office and General Assembly leaves a lot of unanswered questions.”

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