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Western Highlands Networks, pictured here on March 13, has lost its contract with the state Division of Medical Assistance, according to a recent announcement. The agency provides mental health, substance abuse and developmental disabilities services to individuals in eight Western North Carolina counties. Colby Rabon/Carolina Public Press

The state Division of Medical Assistance, a division of the N.C. Department of Health and Human Services, has announced that it will terminate its contract with Western Highlands Network to provide mental health, substance abuse and developmental disabilities services to individuals in Buncombe, Henderson, Madison, Mitchell, Polk, Rutherford, Transylvania and Yancey counties.

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

The announcement was made to Western Highlands’ interim CEO Charles Schoenheit, who then apprised board members.

A bulletin was also distributed to providers within the Western Highlands service area Friday afternoon, according to Julie Henry, public information officer for DHHS.

The effective date for the termination is July 31.

“DMA will work closely with Western Highlands Network to move management of the waiver operations, with the goal of a smooth and successful transition with no interruption in services,” the official notification states. “DMA will ensure that the process is as seamless as possible for beneficiaries receiving mental health, substance abuse, and intellectual/developmental disability services, as well as providers.”

DMA will meet with Western Highlands’ staff next week to talk about what happens next, Henry said Saturday. When asked what prompted the termination and if the organization will fold into the auspices of The Smoky Mountain Center, Henry responded that those will be among the issues to be discussed at that meeting.

The announcement comes after a year of efforts to reverse a budget shortfall of more than $3 million for the organization, the firing of the CEO and resignation of the chief financial officer and chief medical officer. The organization had also hired a consulting firm, with the fees for that firm recently reaching $879,003 for services through June.

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Following an on-site visit in January, Mercer noted in its report to DMA, “The results of this annual quality review indicate that WHN continues to face significant obstacles in executing key waiver operational functions.” Mentioned in the Mercer report were ongoing issues with accurate and timely claims processing, adjudication and payment, inconsistent access to and use of data to support management of the program, and an absence of clinical-care management for those served by the program.

One example of problems with accuracy in payments noted in the report that a $7,000 fee was erroneously paid at $70,000.

While the Mercer team acknowledged the improvements that have been made at Western Highlands, they also noted the lack of a CEO, and the lack of an adequate information system continue to be problems that must be addressed.

“Mercer believes that WHN’s capacity to effectively manage the waiver program over time is at significant risk based on the annual review’s findings and lingering open corrective actions resulting from previous reviews,” the report concluded.

Peggy Manning

Peggy Manning is a contributing reporter for Carolina Public Press. Contact her at pntmoody@bellsouth.net.

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