Cardinal debacle exposes a broken NC mental health care system

Providing mental health care to children is a profound responsibility that demands the highest standards of professionalism, accountability, and compassion. We believe that a strong system of high-quality, accessible, community-based mental health programs will mean healthier children and families, and, ultimately, a stronger Charlotte. Most importantly, we know that our children can’t wait. Their future depends on us to get it right – right now.

So when we hear about excessive salaries and learn that over $6 million in public funding was spent on executive severance packages at Cardinal Innovations instead of on the mental health needs of our children, we are outraged.


But to focus solely on the individual greed of Cardinal executives and the irresponsibility of the Cardinal Board is to miss a larger and more important problem. Long before the pay and severance scandal broke, Cardinal had been failing the 10,000-plus children in our community using Medicaid to access mental health services.

Cardinal is one of seven regional, private-managed care companies that administer public funding for mental health services in North Carolina. Each company receives a lump sum of money from the state to provide services for the people in its service area – if the managed care company meets the needs of the children and adults in their area for less than the amount they receive from the state, then it makes a profit. In a well-run and properly regulated system, managed care companies achieve cost-savings by delivering effective care that produces better health outcomes. They then reinvest a significant proportion of the resulting savings into building an even stronger health care system for the people they serve.

Hughes Headshot

Michelle Hughes

Erin Debnam

However, the reality of managed care in Mecklenburg looks quite different. A recently released report on children’s mental health services, funded by the Children’s Medical Fund, Foundation For The Carolinas, and the Mitchell Fund, interviewed over 80 community stakeholders and found that “the most common complaint, and this is nearly across the board, is Cardinal finds ways to delay, limit and deny treatment.” This includes forcing our most traumatized children to start at lower levels of care than they need so they must “fail up” to the appropriate treatment.

Staff advocates at the Council for Children’s Rights have seen these practices many times in Charlotte. In just one example, clinicians treating a child with a lengthy history of trauma that included abuse, depression, and attempted suicide recommended medication and the highest level of care, but Cardinal insisted the child simply needed outpatient therapy. Fearing for this child’s safety, our advocates worked with persistent providers and the juvenile court judges to eventually secure appropriate services but in the meantime, the child was not getting the help she desperately needed.

While we wish this was an isolated or rare event, our caseloads prove otherwise. Access to care is consistently delayed by difficult and lengthy paperwork that is compounded by slow authorization processes. Pre-authorization from Cardinal can take up to 14 days, particularly for higher level services that are most likely to help children with significant behavioral health needs. All too often, an error in the paperwork, whether by families or providers, not only requires a resubmission, it also resets the 14 day approval clock and takes time away from direct care.

Families should be able to count on Cardinal to approve needed services without excessive bureaucratic delays, and our community should be able to rely on Cardinal to deliver quality, timely services to our children, particularly those who have already suffered the trauma of violence and abuse.

It’s easy for anyone to see that bloated executive severance packages are an unwise and ineffective use of mental health resources, particularly as we fail the most vulnerable people among us. While we wish DHHS had acted to restrain the excessive compensation and severance before the money was out the door, we applaud Secretary Mandy Cohen and her team for intervening to rein in Cardinal Innovations. Ultimately, state policymakers are responsible for ensuring that public funding for health services is administered wisely and effectively.

Our hope is that Cardinal’s blatant malfeasance serves as a wake-up call for state lawmakers and regulators to consider more deeply their role in protecting the health of children and families. We need to measure the success of managed care primarily by the improved health outcomes we achieve, and then celebrate the cost-savings produced by that investment.

Our kids deserve stronger support than what they’re currently receiving from a fractured mental health system.