In a letter dated March 17, 2016, Richard Brajer, Secretary of the North Carolina Department of Health and Human Services, announced that the Local Management Entity-Managed Care Organization (“LME/MCO”) merger process would be moving forward beginning this summer.  Currently, there are eight LME/MCOs that manage Medicaid- and State-funded mental health, intellectual and developmental disability, and substance abuse services through a federal waiver.  After the newly announced mergers, these eight LME/MCOs will be organized into four regional organizations to include: an East Regional LME/MCO (consisting of a merger between Trillium Health Resources and Eastpointe); a North Central Regional LME/MCO (consisting of a merger between Cardinal Innovations and CenterPoint); a South Central Regional LME/MCO (consisting of a merger between Alliance Behavioral and Sandhill Center); and a Western Region LME/MCO  (consisting of a merger between Smoky Mountain Center and Partners Behavioral Health).

The Department believes these mergers will decrease the administrative burden on providers, who are currently required to follow the requirements and deal with the credentialing and billing systems of as many as eight LME/MCOs and will result in better coordination of care and scalability of services. However, providers who have previously experienced these types of transitions know that such a massive process will almost certainly have some negative short-term effects on business and clinical operations.  Providers should look to actively engage in the planning and transition process as much as possible over the coming months and keep a close eye on potential pitfalls that may arise during this process.  Parker Poe will be closely monitoring this processing going forward as well.