Waiver LMEs building an IT Tower of Babel?

While legislation passed this year mandates that Local Management Entities operating under Medicaid Waivers maintain fidelity to the Piedmont Behavioral Healthcare model, that hasn’t been the case when it comes to the critical area of information technology.

Glaring IT deficiencies were cited by the August 2010 Mercer Consulting report as one of many reasons the Department of Health & Human Services was not ready to oversee statewide waiver implementation. And while it might have been expected that the fidelity called for in House Bill 916 would include IT standardization through use of PBH’s Cardinal Innovations (CI) software, that hasn’t been the case. In fact, the list of competing software packages available has actually grown, including one from a company founded by two former PBH employees credited with developing Cardinal Innovations. And since DHHS must approve the software system being used, it is apparently choosing to ignore the Mercer call for standardization.

While a number of LMEs have looked at using the CI software, only two of the seven LMEs approved as waiver entities thus far appear to be going with it: PBH, of course, and East Carolina Behavioral Health. According to Smoky Mountain Center’s March 2011 Medicaid Waiver Readiness Report, both it and ECBH had reached an agreement for the software’s lease/purchase from PBH. (For those wondering how a public entity such as PBH can own and license its own software, suffice it to say that’s another story for another day.)

According to its latest available minutes from April, ECBH is apparently moving ahead with CI implementation, but the May 26 Smoky Mountain Center board minutes reports “challenges” in reaching an agreement with PBH. Shelly Foreman, SMC’s planning and public affairs director, told the board a contract had been signed with AlphaCM instead, reminding the board that “the partners of AlphaCM are the individuals that created CI while working at PBH and continue to provide technical assistance and system upgrades for the CI system.”

Founded by PBH’s former IT director Kevin Ennis and fellow employee Ez Bala in 2005, AlphaCM is a provider of software for many of the state’s mental health providers, but according to the company’s customer map, PBH is the only LME it has counted as a client until now.

According to various documents, until recently PBH retained AlphaCM to maintain and oversee its CI software, and according to Smoky’s readiness report, the companies were working in tandem to develop the software Smoky needed: “PBH will be working in conjunction with AlphaCM, a Wilmington NC based Software Development Company, to make any software modifications necessary to meet any unique needs of SMC and ECBH. AlphaCM has been the primary developer of the PBH system and has installed the software in two other LMEs.”

But that was in March before PBH’s Director of Clinical Operations David Jones left in April to join AlphaCM as head of the company’s new Clinical Operations Consulting group offering services to LMEs in addition to providers.

In informing the Smoky board of the contract with AlphaCM, Foreman noted Pathways LME (the waiver entity forming from the merger of Pathways, Crossroads and Mental Health Partners) had signed with AlphaCM as well. CFO Lisa Shusher noted the cost for software developed by AlphaCM would also be less than would have been spent on Cardinal Innovations.

While not knowing Smoky Mountain Center’s cost, Pathways estimates the cost of AlphaCM services at about $520,000 in its waiver application (page 117).

ECBH chief operating officer Leza Wainwright told that LME’s board in April that negotiations with PBH to lease the CI software for up to 7 years before purchase were ongoing. And while leasing fees aren’t included in those minutes, a purchase price of $250,000 is given.

Systems being used by other approved waiver LMEs — Eastpointe, Western Highlands Network, Mecklenburg County, and Sandhills –include InfoMC’s eCura and two systems from Netsmart, CMHC and Avatar. More on these in a future commentary.

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