Cardinal promises state takeover will have 'zero impact' on its 850K members

By: Jason Stoogenke

Updated:

CHARLOTTE, N.C. - North Carolina's Department of Health and Human Services has taken control of the state's largest Medicaid managed care organization, saying it broke the law, spent millions of tax dollars without permission and can't get back on track on its own.


Now, hundreds of thousands of North Carolinians are caught in the middle, hoping they don't have headaches getting services they need.

Cardinal Innovations Healthcare Solutions provides behavioral health care to 850,000 members in 20 counties.

The state gives Cardinal, headquartered in uptown Charlotte, $500 million in Medicaid money each year. Now, DHHS officials said Cardinal broke the law when it came to compensation and severance payments, spending $3.8 million beyond what it should have.

DHHS took control of Cardinal, dismissed the board and banned outgoing executives from the premises. Officials said it's working closely with remaining staff to stabilize the organization.

Action 9 investigator Jason Stoogenke asked Sen. Jeff Tarte, R-Mecklenburg, who serves on the state's health committee, whether those members are in bad shape in the meantime.

"No," Tarte said, "and I think that's a really important point and message to get out: that all the people who are being served through Cardinal Innovations for their health care needs should be absolutely fine."

Likewise, DHHS said "services and payments will not be interrupted" and Cardinal told Stoogenke "there will be zero impact" on members.

Jessica, who has two daughters who are Cardinal members, said she's "cautiously optimistic."

"For my children and other children I know, this is a life-and-death issue," she said.

Meanwhile, Tarte said the state is already looking into whether it can legally block that $3.8 million in severance pay.

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