Agency’s leaders also rework employee incentives

The Western Highlands Area Authority officially adopted a management agreement with Smoky Mountain Center on May 24, shifting oversight of its eight-county service area into a new organization that will cover 23 counties in the western part of North Carolina.

State health officials with the N.C. Department of Health and Human Services have also approved the plan, which includes Brian Ingraham, CEO of Jackson County-based Smoky Mountain Center, becoming CEO for Western Highlands Network as well, effective immediately.

Once leaders complete work forming the new agency, the boards of commissioners for each of the 23 counties included in the combined service area will appoint a new board of directors.

“While the management agreement is the first step in our partnership, DHHS has asked that we work to develop our consolidated organization by July 1, 2014,” said Western Highlands Board Chair Charles Vines in a statement posted on the Partnership for the Future page of the Smoky Mountain Center website. The post is dated May 23.

The move comes after state health officials notified Western Highlands earlier this year that they planned to terminate the agency’s Medicaid contract. It also follows a previous year that included the firing of its former CEO when it was discovered that the agency had a multimillion-dollar deficit, one that agency leaders went on to attempt to rectify. The agency had, for more than a year, been the managed care organization for mental-health, developmental-disability and substance-abuse services in Buncombe, Henderson, Madison, Mitchell, Polk, Rutherford, Transylvania and Yancey counties.

At the special meeting on Friday, the agency’s board went into a one-hour closed meeting only to emerge and vote to seal the minutes of their closed meeting. Then, with no discussion, the board unanimously approved a motion to approve the management agreement with Smoky Mountain Center. Smoky Mountain Center currently manages services for Alleghany, Alexander, Ashe, Avery, Caldwell, Cherokee, Clay, Graham, Haywood, Jackson, Macon, McDowell, Swain, Watauga and Wilkes counties.

Originally, the N.C. Department of Health and Human Services’ Division of Medical Assistance set July 31 as the termination date of the state contract. However, after Western Highlands submitted a request for an extension, DHHS agreed to move that date up to Sept. 30, according to WHN interim CEO Charles Schoenheit. It is anticipated that the agency may transition most of its operations to the new combined agency by then.

During the four-month transition, Western Highlands will be required to transfer funds to Smoky Mountain Center for managing operations. It will use any fund balances to pay for the costs and liabilities associated with closing out its operations and implementing transition activities, the agreement states.

The joint executive committee representing the two organizations will meet at least monthly to work out the transition plan.

Employee bonuses, severances considered

One of the pressing matters related to the transition is retaining employees. Western Highlands Network voted unanimously May 13 to offer each qualifying employee a one-time bonus of at least $3,500 to stay.

That plan was revised during the May 24 meeting to include certain stipulations regarding how and when staff would be eligible to receive the bonus.

The management agreement requires Smoky Mountain Center to notify each employee of Western Highlands Network within 60 days about whether there are employment opportunities with SMC.

“It is the express intent of this agreement that SMC and WHN will retain the maximum number of staff from both entities to fill all necessary staff positions,” the agreement states, and “where appropriate, SMC shall give preference to WHN employees over outside applicants in filling all staff positions.”

Employees not offered a position by Smoky Mountain Center will receive a minimum severance package of $3,500, but may not apply to SMC or the new entity for up to six months following their date of separation. Employees not offered a position by SMC, but who have been employed by Western Highlands for less than one year, will receive a retention bonus of $1,500.

One eligibility clause approved in the revised guidelines stated that employees offered a position at SMC that ensures no break in service would receive a $1,500 bonus.

“There will be a period of time when there is uncertainty about staff positions. It will take a while to decide who will have a job,” Schoenheit said.

The retention bonus will not be given to employees who leave Western Highlands prior to Sept. 30 or who are part of a reduction in workforce prior to Sept. 30. The total cost for the one-time retention incentives is projected to be more than $930,000.

According to a May 9 memo sent by Western Highlands Human Resources Director Rhonda McKee to the agency’s board members, seven employees have resigned since the announcement of the state’s intent to terminate Western Highlands’ contract.

When the retention plan was originally considered May 14, board member Carl Classen said the bonuses would be paid 84 percent from Medicaid funds and 16 percent from other undesignated funds. He also said the finance committee would seek to have the bonuses paid entirely from Medicaid funds.

However, Schoenheit said Friday that those funds will come from Western Highlands’ administrative budget, not from Medicaid or other service funds.

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

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