Officials delay finalizing transition to Smoky Mountain Center

Fearing that employees will quit before the proposed transition of the management of behavioral health services to a neighboring organization, officials with Western Highlands Network voted unanimously Monday to offer qualifying employees a one-time bonus of at least $3,500 to stay.

The Western Highlands Network governing board approved a resolution of intent on April 25 to begin working with Smoky Mountain Center, based in Jackson County, on a plan to transition the management of the state contract for Medicaid waivers and other functions.

Western Highlands has been the managed care organization for more than a year for Buncombe, Henderson, Madison, Mitchell, Polk, Rutherford, Transylvania and Yancey counties. Smoky Mountain Center manages services for Alleghany, Alexander, Ashe, Avery, Caldwell, Cherokee, Clay, Graham, Haywood, Jackson, Macon, McDowell, Swain, Watauga and Wilkes counties.

Officials had originally planned to finalize that agreement at today’s meeting. It was postponed, however, because the plan was not ready for consideration, board chairman Charles Vines said.

“We thought we would have it, but we didn’t. That’s why I removed it from the agenda,” Vines said after the meeting.

But the agreement isn’t the only major task ahead for the transitioning organization. Staffing concerns are also taking a spotlight.

Prior to the meeting of the full governing board, personnel and finance committees discussed proposed retention incentives.

Arthur Wilson Jr.
Artie Wilson

“We are concerned that staff will be leaving before this transition,” said board member Artie Wilson.

He said two options for retaining employees were considered. One was a bonus equal to 10 percent of the employee’s annual salary, with a minimum bonus of $3,500 and a maximum of $7,500. The other was the $3,500 minimum bonus, with no cap on the amount.

Wilson said the $3,500 minimum was recommended because 10 percent of the annual salary for 31 of the agency’s employees would be below $3,500. He said the personnel committee recommended the latter option, leaving the final amount open for consideration.

Interim CEO Charles Schoenheit said 185 employees would be eligible for the bonus. The total projected cost for the one-time retention incentives is $931,297, Wilson told the board.

The effective date for the bonuses would be July 31 or Sept. 30.

July 31 is also the termination date set for the state contract. However, the board has asked the Division of Medical Assistance with the N.C. Department of Health and Human Services for an extension until the end of September to complete the transition to Smoky Mountain Center. The board does not know yet if state health officials will agree to the extension.

Carl Classen
Carl Classen

Western Highlands Network board member Carl Classen, who serves on the organization’s finance committee, said the bonuses would be paid 84 percent from Medicaid funds and 16 percent from other undesignated funds. He said the finance committee is seeking to have the bonuses paid entirely from Medicaid funds.

“We need our staff to help close out this transition and to close out our organization,” Classen said. He said about 11 accountants, auditors and attorneys would be crucial to completing the move to Smoky Mountain Center.

“We hope we can work with Smoky to retain those employees,” he said.

According to a memo sent to board members May 9, seven employees have resigned since the announcement of the state termination of Western Highlands’ contract.

“We are in a critical situation with maintaining the staff necessary to continue operations at WHN while we transition with Smoky. Staff have scheduled interviews and/or are receiving offers from other employers due to this period of uncertainty while major HR (Human Resource) decisions are being made,” the memo stated.

“Both Smoky and WHN are working diligently on the transition, but until there are guarantees for positions, staff are nervous and feel they must pursue employment opportunities,” it continued.

“We have been understaffed. This is due to the hiring freeze that was put in place last year, but also due to the reorganization with the Thornton group. We did not hire staff in order to assure that qualified staff would have positions in the reorganization. We have been utilizing temporary staff in some areas to bridge gaps that have turned into extended periods of time. WHN needs every employee to maintain the functions of running WHN,” the memo concluded.

The executive steering committee, made up of the chief executive officer, chief operating officer, chief financial officer, and waiver managers from Smoky Mountain Center and Western Highlands have met, and the issue of retaining staff is of grave concern to the steering committee, according to the memo.

The two organizations have each set up “Partnership for the Future” information on their websites about the transition. It also gives providers and consumers the opportunity to sign up to receive email updates.

Visit or to find news, events and answers to frequently asked questions about the effort.

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

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