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Founded 05-05-05

Consultant’s Report Ranks Smoky Mountain in Top Tier of Mental Health LMEs

Story by Kathleen McFadden

Earlier this month, N.C. Department of Health and Human Services Secretary Dempsey Benton released an independent consultant’s report that says North Carolina should have fewer local management entities (LMEs) to provide community management of mental health services.

In response to increasing concerns and criticism about the state’s provision of mental health services, Governor Mike Easley asked for an independent, comprehensive review of the performance of the local management entities that are responsible for managing mental health, developmental disabilities and substance abuse services at the local level throughout the state.

Mental Health Reform in Brief

Before 2001, area authorities—locally New River Behavioral Healthcare—were responsible for providing mental health, developmental disabilities and substance abuse services.

In 2001, the North Carolina General Assembly ordered sweeping changes of the way mental health services are provided, mandating that area authorities no longer provide direct services, but transform into local management entities and contract with private providers for services.

The mental health reform initiative projected that fewer people would seek help in state hospitals, but the reality has been that not enough community care is available for emergencies, and state hospital admissions have increased.

According to an investigative report by the News & Observer, the state has wasted at least $400 million. Since 2001, the News & Observer reported, the cost of caring for the mentally ill has more than doubled, to $1.5 billion a year.

The Mercer Report

The Department of Health and Human Services hired Mercer Government Human Services Consulting to conduct the five-month review. This study is the first of two reports required under the $794,000 contract with Mercer.

The performance level of the LMEs has a direct impact on how easily and quickly consumers can access services and the quality and effectiveness of the services they receive. The Mercer Report examined how a fully functioning LME should operate and evaluated each LME on its overall performance in three broad categories: financial and business management; information technology and claims management; and clinical operations and governance.

Mercer found that seven LMEs are performing the combined functions at an above-average level (Tier 1), 13 are performing at an average level (Tier 2) and five are below average (Tier 3).

To read the full report, click to www.dhhs.state.nc.us/mhddsas/.

Smoky Mountain Rankings

Smoky Mountain Center is among the seven LMEs the Mercer study ranked as above average, or as Tier 1. Smoky Mountain Center now functions as the LME in the counties formerly served by New River Behavioral Healthcare. New River has divested its former management functions and provides services under contract to Smoky Mountain.

Smoky Mountain Center ranked as Tier 1 for financial and business management operations and for information technology and claims management. However, for clinical operations and governance—an assessment of the organization’s structure and the status of transfer of direct services to local providers—Smoky Mountain Center ranked in Tier 2.

Mercer Recommendations

Although some criticism has been leveled at the consolidation of multiple counties under fewer LMEs than before 2001, the Mercer Report calls for even fewer LMEs statewide. The report proposes three options for improving services:

• Create three to five regional entities and convert the other existing LMEs into core service providers. Mercer estimates selection of this option would result in approximately $25 million per year savings on administrative overhead.

• Create a central management entity for the entire state that could be formed through a consortium of existing LMEs, with some LMEs becoming providers or core service agencies.

• Use voluntary consolidation to reduce the number of LMEs to fewer than 20.

The report also includes recommendations for how management of community services should be conducted to improve performance, regardless of structure. Some of the key recommendations are the following:

• A full-time psychiatrist serving as medical director

• A trained mental health specialist, a developmental disabilities specialist, and a substance abuse specialist as part of clinical staff

• Clinical staff reporting to a licensed clinician

• An annual financial audit by an outside auditor

• A medical doctor on call 24 hours a day for crisis services

• Service providers paid promptly

• Two to three percent of all paid claims audited to ensure that services billed were actually delivered

• Provider and consumer satisfaction with services assessed routinely

• A report on provider performance made available to the local community service area on a regular basis