The board of the Western Highlands Network (WHN), which manages mental health Medicaid waivers for eight Western North Carolina communities, including Polk, fired CEO Arthur Carder Jr. last week after the discovery of a $3 million projected shortfall this year.

“Board members are already working on a transition plan in conjunction with the network’s leadership team and next steps for the recruitment process to identify a new chief executive officer,” said a WHN press release.

Western Highlands in January assumed management of the N.C. Mental Health, Substance Abuse and Intellectual/Developmental Disabilities Health Plan for Medicaid enrollees in Polk County as well as Buncombe, Henderson, Madison, Mitchell, Rutherford, Transylvania and Yancey counties. Prior to WHN taking on this role, the Medicaid waiver program was administered through a private company.

Polk County Manager Ryan Whitson, who is the second longest serving WHN board member, said the network has never seen a budget shortfall of this extent.

“We didn’t have any signs that this was going to happen,” Whitson said.

He said the network did, however, voluntarily take on responsibility for the waivers before the state mandated them to do so, despite several board members’ skepticism.

Whitson said he as well as the Henderson, Madison and Transylvania county managers all voted against taking on the waiver program.

“I was opposed to the Medicaid waiver because I felt we would run into financial issues,” Whitson said. “The way you save money on Medicaid is to cut services. I don’t care how you sugar coat it – I never believed it would allow us to provide additional services as some said at the time.”

A release back in December 2011 stated the N.C.-Department of Health and Human Services (NC-DHHS) selected Western Highlands to administer the program because, “Western Highlands Network demonstrates the skills, ability and infrastructure necessary to successfully operate under a 1915(b) (c) waiver.”

The goals of the waivers, the release said, were to increase consumer access to care, improve quality of care and demonstrate cost effectiveness.

Whitson said he believes other networks could face the same issues if not diligent.

“They’re all going to face this situation if they are not careful,” Whitson said. “I think through good management they can avoid our pitfalls.”

The Western Highlands Network currently has a $6 million surplus, but Whitson said he predicts this surplus will be cut in half by the pending deficit.

“I think the situation can be turned around, and the board members are committed to turning it around – we don’t have a choice,” Whitson said.

Whitson said although the board has not voted on its next move, he believes they will have to go back and look more carefully at how claims were filed. He said he then believes there could be looming cuts to the amount providers are paid for services and the potential cut of covered services in general.

The WHN board meets again this Friday, Aug. 3, to iron out its next steps to cover the deficit and to prevent incurring any further debt, Whitson said.

“The board is committed to caring for the mental health patients in our eight-county region,” Whitson said. “And that’s what we’re going to make sure we continue to do.”