June 18--A late change to a bill giving more power to groups that oversee behavioral-health services in the state is raising concerns among advocates because the new language allows oversight groups to gain even more authority than the initial bill did.

The changes to the bill would create a new category of oversight group -- a behavioral health authority. A BHA could borrow money and buy or sell property, would have no limits on executive salaries and would not be required to have any advocacy group members on its board.

The new language was inserted into N.C. House Bill 1075 on June 11 -- five days after the bill had passed the House.

The substitute bill has been put on the Senate's agenda for Tuesday. If approved, the bill would return to the House for review and potential passage.

The changes would allow a local management entity (LME), such as CenterPoint Human Services, to become a behaviorial health authority after three years of serving as a managed-care organization (MCO) under the Medicaid waiver program being rolled out in the state.

The waiver program is intended to combine the management of Medicaid and state funds at the community level to reduce costs and add more accountability. MCOs would operate with fewer restrictions on how they manage the mental-health, developmental-disability and substance-abuse providers and services they oversee.

Becoming a behavioral health authority would take the oversight groups' level of independence to a higher level since public authorities can borrow money and buy or sell property. Authorities have limited or no local government oversight on their overall operations. They are allowed to file lawsuits and have a legal staff.

The initial bill already shifted much of the oversight of an MCO from county commissioners to the N.C. Department of Health and Human Services. The DHHS secretary would be required to approve a group's change to a behavioral health authority.

Local and statewide advocates expressed exasperation when informed of the new language. They worry that past mistakes in state mental-health reform will be repeated, hurting patient care and costing the state tens of millions of dollars in wasted spending.

David Cornwell, executive director of N.C. Mental Hope, said the proposals before the latest change already gave MCOs the best of being a private and a public entity.

"I don't see how it's conscionable for largely clueless legislators to consider such far-reaching changes to an already shattered system at a time the state faces multiple lawsuits over its (behavioral-health) services," Cornwell said.

Controversies over care

The bill is the latest development in the controversial recommendations submitted in September by Piedmont Behavioral Healthcare and the N.C. Council of Community Programs.

The bill's primary sponsors are state Reps. Nelson Dollar, R-Wake, and Justin Burr, R-Montgomery. The bill has bipartisan co-sponsor support.

Senate sponsors of the new language are not identified. Dollar and Burr could not be reached for comment about whether they approve of the new language.

Piedmont Behavioral Healthcare is the only local management entity operating as an MCO, but 11 MCOs, including CenterPoint, are supposed to be operating statewide by Jan. 1.

The council, led by CenterPoint executive director Betty Taylor, wants to eliminate limits on top executive salaries because MCOs compete with private-sector insurance companies for staff with specific expertise. Salary proposals would not require the approval of the DHHS secretary.

The bill removes the requirement that county commissioners approve the hiring of an MCO director, giving that responsibility to the MCO board. Advocates say many LME boards already operate as rubber stamps for their executive directors.

The benefit for county governments, particularly those with tight budgets, is that the changes could limit their liability for MCO overspending and put it on DHHS.

The new language represents substantial additions to those recommended by a 24-member General Assembly subcommittee before the legislative session began in May.

For example, advocates and analysts said they are concerned that although membership on a BHA board is expected to reflect expertise on local needs and priorities, including at least one family member or individual from an advocacy group is suggested only "when possible."

"There appear to be no absolute compositional requirements for the board of a behavioral health authority," said Mark Botts, an expert on mental health records and confidentiality at UNC Chapel Hill School of Government, in an email to advocates.

The initial bill required MCO board seats for a county commissioner, individuals or family members of those with behavioral-health issues, a member of the general public and professionals with expertise in health care.

Botts' email said a behavioral health authority would have even fewer requirements for board composition than in the current statutes or the previous version of the bill.

Laurie Coker, a local advocate who served on the General Assembly subcommittee, said a major concern is whether MCOs will be more responsive to customer demands.

"There have been troubling additions to the original bill on MCO governance," said Coker, who also serves director of the N.C. Consumer Advocacy, Networking and Support Organization.

"We could move toward much more privatized system management, in that public input and responsibility through counties could be cut out altogether from local management. Yet we supposedly are to have a public managed-care system, and not a private one."

Coker said the initial bill reflected agreements derived from "a level of critical discussion rarely had in committee meetings that involve such a variety of perspectives.

"North Carolina doesn't need further complication and confusion added to our already substantial system change. We need the inclusion of consumers, family members and county officials to ensure best outcomes locally."

Worries about unknowns

Al Delia, acting DHHS secretary, acknowledges that patients and caregivers are worried about the unknown. He said LMEs must clear several hurdles with state regulators before managed care is instituted, and mistakes are being fixed.

"DHHS believes this amendment represents a substantive change and that it deserves more thorough discussion," said Julie Henry, DHHS' acting director of public affairs.

"We are concerned about the limits the measure places on DHHS' authority and oversight. The amendment would exempt BHAs from provisions of the state mental health statute."

In an exchange reported by the Associated Press, Sen. Jim Davis, R-Macon, said "this whole thing scares me to death" during a discussion of the House bill before it was referred to the committee on mental health and youth services. The discussion, which lasted several hours, appears to have taken place before new language was inserted.

If lawmakers struggle with this bill, Davis asked, "How are we going to take care of the folks that this governance is supposed to be protecting?"

Dollar told Davis turning back now is a mistake.

Otherwise, Dollar added, "You're almost going to doom this iteration of reform to failure, and I would just submit that we cannot afford to do that for the citizens of this state."

Several legislators serving the Triad said the complex nature of creating a BHA will require more time to understand than the current short legislative session will allow.

Dave Plyler, a Forsyth County commissioner who has paid close attention to local behavioral-health issues, said, "Legislators appear badly divided with no sense of what needs to be accomplished. One size does not fit all."

The changes to the bill come as CenterPoint is requesting $1.53 million from Forsyth County to help with its estimated $3.7 million cost of transitioning to a Medicaid waiver program.

CenterPoint receives taxpayer funding as a local management entity in Davie, Forsyth, Rockingham and Stokes counties.

Without the allocation -- to be paid back over five years -- the agency warned it would cut its discretionary funding for services in Forsyth by about 42 percent. The agency also wants one-time funding of $228,579 from Rockingham, $148,127 from Stokes and $89,270 from Davie.

CenterPoint's first MCO application was rejected in July, primarily because a health-care consultant, Mercer, questioned the agency's financial liquidity, information technology and clinical operations. Mercer recommended CenterPoint pursue extra funding from the counties it serves and alternative sources. CenterPoint's second application was approved in October.

Advocates worried about the threatened service cuts at a time when more people with behavioral-health issues lack insurance.

Although the counties provide about $5.3 million annually, they do not, by state statute, have a say in how the money is spent.

"In an already underfunded system, a further reduction compounds the unmet needs," Taylor said in a statement.

However, at a May board meeting, Forsyth commissioners had too many questions about CenterPoint finances and legislative changes to decide on the funding request. Forsyth County Manager Dudley Watts said the board is working on finding a time for a briefing session on the issue in June.

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