Eastpointe consolidation vote
By Rochelle Moore
Published in News on February 9, 2017 8:30 AM
Sarah Stroud, chief executive officer of Eastpointe Human Services Wednesday following a board meeting at the University of Mount Olive.
MOUNT OLIVE -- Eastpointe Human Services, which oversees mental health, substance abuse and disability services in 12 counties including Wayne, is positioned to become part of one of the state's largest behavioral health organizations.
The Eastpointe board voted unanimously Wednesday to consolidate with Cardinal Innovations Healthcare, which could lead to Cardinal overseeing services to nearly one third of the state in 32 counties, said Sarah Stroud, Eastpointe's chief executive officer.
The board decision is subject to approval by the N.C. Health and Human Services secretary, with Eastpointe seeking consolidation by July 1, said Jonathan Charleston, Eastpointe's attorney.
"Every piece of this negotiation has been around, number one, our members that we serve, number two, our providers and, number three, our employees, and that's where my heart is," Stroud said. "I do believe we have made every best effort so services can continue. I believe that members will receive enhanced services."
The manner in which the decision was made during a closed-door meeting is questionable, said Mike Tadych, an attorney with N.C. Press Association.
The board met in a conference room inside the University of Mount Olive cafeteria and posted a closed session "Do not enter" sign on the door.
When the meeting was over, several board members opened the door and left. There was no indication that the board had re-convened back into open session to take the vote, which is required by the N.C. Open Meetings Law.
Board chairman Rob Boyette, also a Wilson County commissioner, said the board discussed the negotiations surrounding the agreement and went back into open session for the vote. The door remained closed, a typical practice of the board, due to the room being next to a sometimes noisy cafeteria. Boyette said there was no intent of the board to shut the public out of the meeting.
"Not letting anybody know they're going into open session does not mean they are in open session," Tadych said. "I think if they went into open session with a note on the door, they're in closed session It's still a closed session.
"I think that it's a gray area, but it should be resolved to the benefit of the public and not the benefit of the board."
Eastpointe board member and Wayne County Commissioner John Bell did not attend the meeting and was out of town. He views the consolidation as positive for area residents.
"I'm in agreement with it," Bell said. "We've been trying to consolidate with other (managed care organizations) for the past year or so. Based on my understanding, it's just going to be a good fit."
Bell sees the change as possibly opening the door for more services, including walk-in clinics for people experiencing mental health problems.
Eastpointe, based in Beulaville, is a publicly funded managed care organization that receives federal, state and local tax dollars to operate. The primary source of revenue, about 90 percent, comes from Medicaid, Stroud said.
Wayne County currently provides Eastpointe with $42,000 in annual funding to directly support family drug court, Stroud said.
Eastpointe oversees contracted services to as many as 200,000 eligible residents in its 12-county area. The consolidation would increase Cardinal's service area to more than 1.1 million residents across the state, Stroud said.
The main terms of the agreement involve Cardinal taking over all of Eastpointe's contracts, which are funded primarily by Medicaid through the state Division of Mental Health and Division of Medical Assistance, Charleston said.
Cardinal will also take over the assets of Eastpointe, which include a $300 million budget and a $39.4 million fund balance reserve, Charleston said.
"The key thing that Eastpointe does is it has the (service) contracts with the state of North Carolina to manage Medicaid and the behavioral health space," Charleston said. "So, Cardinal's going to assume that, those contracts, and will then assume all the functions that Eastpointe has."
Eastpointe's 300 employees will also be able to apply for positions within Cardinal Innovations.
"They're going to make offers of employment to all of Eastpointe employees," Charleston said. "What was negotiated is that all of the Eastpointe employees will be offered jobs under the new arrangement with Cardinal, so everybody has a chance of being fully employed."
Stroud said she plans to work for Cardinal Innovations in some capacity.
"I'll receive a job offer from Cardinal," she said. "I'll be working for the organization."
The consolidation is part of a state directive to reduce North Carolina's remaining seven managed care organizations to four, Charleston said.
"The state did not intend for all these managed care organizations to stay in place," Charleston said. "The state wants to shrink it. That's what's driving everything is the legislature's decision to reform."
Cardinal Innovations is the third largest MCO in the state and could become the largest after absorbing Eastpointe, depending on other consolidation efforts.
Cardinal, based in Kannapolis, currently oversees services in 20 counties, including Mecklenburg and Forsyth.
Consolidating with Cardinal will offer benefits, including services to area residents, Stroud said.
"In the last five years, at Cardinal as it exists now, they have added 22 additional Medicaid services that are not even available in our area now," Stroud said.