Board wants state law restricting CEO benefits changed

A recent surprise visit by Mercer Government Human Services Consulting — the firm asked by the state Division of Medical Assistance to perform a review of Western Highlands Network — resulted in a favorable report of the Asheville-based managed care organization.

Charles Schoenheit, chief operating officer and interim CEO for Western Highlands
Charles Schoenheit, chief operating officer and interim CEO for Western Highlands

Mercer conducted the onsite review at Western Highlands from Jan. 8 – 10, and a report on that visit was presented to Western Highlands’ governing board on Tuesday. Western Highlands provides mental health, substance abuse, and developmental disability services in Buncombe, Henderson, Madison, Mitchell, Polk, Rutherford, Transylvania and Yancey counties.

According to information provided at the meeting, the reports’ positive reviews were largely contributed to the changes recommended by an independent consulting group hired by the agnecy’s board.

But while the report was mostly favorable, one it sited a problem with the agency’s leadership vacancies, particularly in the CEO position, according to Charles Schoenheit, chief operating officer and interim CEO for Western Highlands.

The board has been trying to hire a CEO since it’s former leader, Arthur Carder Jr., was fired last July after the board learned of that a $3 million budget shortfall had gone undisclosed. Shortly after that, the chief financial officer and medical director announced their retirement.

Board Chairman Charles Vines
Board Chairman Charles Vines

The search for a CEO has taken longer than expected because of a state law that restricts the board from offering a new CEO relocation expenses and a severance package. Chapter 122C of the Mental Health, Developmental Disabilities, and Substance Abuse Act states that an area board “shall not provide the director with any benefits that are not also provided to all permanent employees of the area program.”

Board members have been talking with state legislators about getting the law changed and are hoping that will happen when lawmakers meet next week, board chairman Charles Vines said. That will allow the board to move forward with the CEO search, who can then hire a chief financial officer.

“We are about to sign a contract with a new medical director,” Schoenheit said, which will then complete the leadership slots.

Consultant fees going up

Earlier during the meeting, the governing board received a progress report from Mary Thornton, the consultant hired to help stabilize the managed care organization. Thornton presented a request for an increase in compensation for the services she and three other associates will continue to provide through June if the board agrees to pay the hefty increase.

Mary Thornton
Mary Thornton

Initially, Western Highlands hired Thornton for a period of 450 days for $250,852. But, at another recent meeting, Thornton asked the board to increase that amount to $510,000. The board agreed to approve the increase, but some board members expressed concern that they had not been kept apprised of the growing tab.

“My understanding was that everyone knew $250,000 wouldn’t be enough,” Schoenheit said.

He accepted fault Tuesday for not providing a strict accounting for the time the consulting group has spent on resolving organizational problems.

Thornton explained that the increase was due to the project’s workload. Western Highlands’ operations were more fragile than she had anticipated, and staff resistance to reorganization plans were stronger than expected, she told the board.

“It’s worse than we thought coming in,” Thornton said. “Despite some considerable obstacles, we have made a great deal of progress in stabilizing Western Highlands Network operations and finances.”

The consultants are providing staff training, working on better management of data reporting, services and claims management, and developing a reorganization plan. Thornton said that she did not know when she was hired that Western Highlands was also in the midst of securing accreditation from the Utilization Review Accreditation Commission.

With more work still to be done, Thornton presented a proposal for an additional $369,003 for services through June. That is in addition to the $510,000 recently approved, bringing the total consulting fees to just over $879,000.

Board member Carl Classen, chairman of the board’s finance committee, said the committee had not received detailed reports on the Thornton contract and he would like to see measures be put in place so that would not happen in the future.

“I don’t want to slow down the progress of the consultants … But, I don’t think we need to get into a lengthy discussion with the full board,” Classen said, suggesting that a special meeting be called to consider the increase in compensation after the finance committee is able to discuss the request.

Members call for statewide billing system

During the report from Thornton, she mentioned that one example of the consulting firm’s work is trying to get a new information technology system in place. According to staff reports, requests for proposals were published in December and eight vendors have responded. Two of those vendors are currently serving Managed Care Organizations.

Board member Mandy Stone of Buncombe County suggested that a statewide system for Medicaid billing would be more productive than each Managed Care Organization having a different program.

“It’s absolutely absurd,” Classen said. “Why doesn’t the state do the right thing and set up a statewide uniform billing system? It’s bad for providers and even worse for citizens.”

Thornton said no state is using a standardized information technology system. One problem with a uniform system is the inability to customize information and forms on a local level.

Staffing concerns arise during reorganization

But in addition to other work, Thornton’s firm has progressed with its reorganization plan despite it being stalled by both the need to convince staff of its soundness and consultants’ inability to work more closely with certain departments until after accreditors visit the agency.

But the plan has been approved by both Mercer and the Division of Medical Assistance, she said, adding that the firm is now at the point of establishing a timeline for implementation, informing staff of their opportunities and assisting management with taking on new responsibilities.

Stone said she is concerned about the lack of willingness by staff to work with consultants for the reorganization.

Thornton responded that while the reorganization would require skills and experience matching those needed for the role of a managed care organization model, she said that she believed employees can take other positions within the organization so that most can retain their jobs.

To that, Stone replied, “I just don’t want to see in the headlines, ‘Everyone has a seat on the bus, even if it’s not the right seat.’”

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Peggy Manning is a contributing reporter for Carolina Public Press. Contact her at

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  1. $879,000 paid to pals just before western highlands et al are merged into PBH, Wish they would quit pretending they are trying to save money.

    hard to explain to all the kids that got kicked out of therapeutic foster care this month why frugal only apples to them. the policy choices are anything but financial good sense,

    higher needs kids get channeled down into the foster system and foster parents refuse to take them or they blow out, then they go into an expensive residential placement maybe even preceded by a$$$$$$$ hospital stay.. Or worse yet they go back to active meth using parents, and of course to be frugal we gutted every substance abuse recovery program

    someone is cashing a check for $$$$$ while homeless kids are scrambling to stay in school or living with drug addicted parents in horrific circumstances.