Two organizations that manage behavioral health services for people on Medicaid and for some uninsured people in different areas of North Carolina have agreed to merge into a single entity that will serve more than 100,000 people across 21 counties.
Eastpointe, an organization that coordinates care for low-income residents in 10 eastern counties, last week said it intends to consolidate with the Sandhills Center, which operates in 11 southwestern counties. The consolidated entity is expected to be the second-largest of its kind in the state “based on population,” according to a news release from Eastpointe.
Sandhills Center and Eastpointe are part of a network that currently consists of six state-supported managed care agencies, commonly called LME-MCOs, Local Management Entity-Managed Care Organizations, that serve people with mental health needs, substance use disorders, and intellectual or developmental disabilities. These people tend to require more extensive care and support than the average Medicaid participant.
The LME-MCOs play a critical role in the N.C. Department of Health and Human Services’ vision for the future of Medicaid, which includes moving many of the residents served by the agencies onto specialized health care plans that are tailored to their complex needs. DHHS had originally hoped to launch the tailored plans in December 2022. After multiple delays, the department announced last month that the rollout would be postponed indefinitely to give the LME-MCOs more time to prepare for the transition.
In a statement to NC Health News on Friday, DHHS said the decision to delay the launch of tailored plans was “influenced in part by the need to ensure LME/MCOs readiness and focus on providing services to populations they are best positioned to manage successfully.”
“Ensuring that all North Carolinians have access to quality whole-person health care is central to the Department’s mission,” a DHHS spokeswoman said in an email. “This is especially true when it comes to management of the Medicaid tailored plans that will serve people with complex behavioral health conditions, intellectual/developmental disabilities and traumatic brain injury.”
The spokeswoman added that DHHS will “evaluate the intent to consolidate” Sandhills Center with Eastpointe and “work with the entities on a path forward that best serves improving outcomes for the people of our state.”
‘The best opportunity’
The department has said about 150,000 people, or 5% of the state’s Medicaid participants, will eventually be moved to tailored plans. The LME-MCOs will be responsible for coordinating care for tailored-plan enrollees by acting as intermediaries between patients and providers, who will work under contract with the agencies.
In the news release announcing the consolidation agreement, Sarah Stroud, CEO of Eastpointe, said combining with Sandhills Center will “give us an unmatched ability to deliver quality benefits and support our provider partners while also meeting the objectives of the state’s policymakers.” Stroud will serve as CEO of the consolidated entity, which has not yet been named.
Anthony Ward, who earlier this year became CEO of Sandhills Center, added that consolidation “offers the best opportunity to preserve local management of services for individuals in our communities.” In an email to NC Health News, Ward said he will be executive vice president of the consolidated organization.
No layoffs are expected in connection with the consolidation. The new entity will employ nearly 900 people and oversee an annual budget of about $1.4 billion, according to the news release. It will be based out of Sandhills Center’s facility in the Moore County town of West End.
In addition to Moore, the Sandhills Center covers Anson, Davidson, Guilford, Harnett, Hoke, Lee, Montgomery, Randolph, Richmond and Rockingham counties. Eastpointe covers Duplin, Edgecombe, Greene, Lenoir, Robeson, Sampson, Scotland, Warren, Wayne and Wilson counties.
The boards of Eastpointe and Sandhills Center, which are made up of 19 commissioners from the agencies’ respective counties, will be condensed into a single board. The consolidated organization will “draw about half of its board members from each LME-MCO,” according to the news release.
Harry Southerland, a Hoke County commissioner who chairs the Sandhills Center board, said the agreement “presents a tremendous opportunity to promote superior services to our members and meet the goals of the Department of Health and Human Services and our legislature.”
His comments were echoed by Jerry Jones, a Greene County commissioner who chairs the Eastpointe board. Consolidation, Jones said, “ensures our approach to service delivery reaches more members at exactly the right time as North Carolina looks to expand its Medicaid program.”
The proposed consolidation must still be approved by DHHS. In its statement to NC Health News, the department said it does not know how long that will take.
“Without having seen the specific proposal at this time, it is hard for NCDHHS to comment on the consolidation,” the department said.
The last consolidation of an LME-MCO occurred after the demise of Charlotte-based Cardinal Innovations in 2021, after a series of spending scandals and dissatisfaction with the organization’s services expressed by commissioners in multiple member counties.
If approved, the new consolidation will reduce the number of LME-MCOs in North Carolina to five. The other agencies are Alliance Health, Partners Health Management, Trillium Health Resources and Vaya Health.
North Carolina Health News is an independent, nonpartisan, not-for-profit, statewide news organization dedicated to covering all things health care in North Carolina. Visit NCHN at northcarolinahealthnews.org.
