Broken System Ahead: Catawba Valley Behavioral Healthcare
EDITORIAL NOTE: This article is part one of an investigative series surrounding the mental health system in Catawba and Burke counties.
HICKORY, NC – As another holiday season is behind us, most people can take a sigh of relief. The hectic shopping, parties and events are now over. But if you are one of the hundreds of mental health consumers who were recently informed their services were being terminated, there simply is no sigh of relief.
Catawba Valley Citizen has been working on a year-long project, taking a serious and honest look at the local mental health system. Our investigation involves hundreds of hours and thousands of documents, news tips and interviews. Over the next few weeks, we will begin piecing together this investigation in a series we are calling BROKEN SYSTEM AHEAD: An Investigative Report.
Today we are taking a look at one of the area’s largest mental health service providers. The Mental Health Fund, Inc was founded in 2005 to provide mental health services to individuals living with mental illness and developmental disabilities. The agency “does business as” Catawba Valley Behavioral Healthcare or CVBH.
When the State of North Carolina passed what it called “mental health reform,” local governments were prohibited from providing mental health services. Instead, the new law required these services to be provided by private providers, such as CVBH. So, a group of individuals who worked for Catawba County Mental Health, came together to create a non-profit tasked with that responsibility.
Our sources tell us that John Hardy, who was the director of Catawba County Mental Health, played a very important role in the creation of CVBH. Today, Mr. Hardy serves as the area director of a state entity responsible for ensuring mental health services are provided according to the law. (More about that in a later report)
When the new law took effect and the transition began happening, many folks probably never realized there was even a change in the law. CVBH began operating in the same building as Catawba County Mental Health. The phone numbers, fax numbers and even much of the staff remained the same. And it is still that way to this day. Many people feel that the only thing that changed at 3050 11th Avenue Drive SE in Hickory was the sign on the outside of the building.
John Waters was an employee of Catawba County Mental Health. He also played a key role in creating CVBH. When Catawba County ceased providing mental health services, Mr. Waters left the county to head up CVBH. The career change from being a county employee to working for a non-profit organization proved profitable for Mr. Waters, as he seized the opportunity to give himself an $18,000 raise – roughly 28% per year.
According to financial documents obtained by our investigative team, Mr. Waters continues to make over $20,000 (or 32%) more per year than when he worked for Catawba County. That’s $66,267 more than the average citizen in Catawba County. Each week he makes $1,666, that’s more than the average household in Catawba County. [Source: Wikipedia]
You may ask yourself, how the executive director of a non-profit can afford such a lucrative salary. We have learned that this may be, in part, due to an ongoing incestuous relationship between CVBH and Catawba County. As we previously mentioned, CVBH remains housed in a county building. But its relationship with Catawba County does not end there.
Our investigative team has uncovered some very alarming facts. Catawba County provides technology services for CVBH. This service includes hosting the organization’s website, providing email capabilities, as well as maintaining networks, computers and other technologies. And these services aren’t limited to the facility CVBH rents from Catawba County. Catawba County IT staff (paid for by tax dollars) drive to Burke County to service CVBH’s technology needs in their Morganton office as well.
Think that’s it? When one of CVBH’s vehicles needs gasoline, they pull up to Catawba County’s gas pumps and fill’er up! Our investigative unit has learned that Catawba County government allows CVBH to do this without a written contract or agreement. Having access to this gas supply, allows CVBH to save hundreds of dollars that other non-profits are forced to pay because the county purchases gas in such large quantities and receives a huge discount. The gas is also not taxed. CVBH simply reimburses the county for its cost of the gasoline.
How many other non-profit organizations or non-government entities do you think Catawba County extends this offer? County officials tell us that CVBH is the only other non-governmental agency that gets this benefit.
But, that’s not all. CVBH’s staff receives mobile phone and wireless mobile internet services through Catawba County’s contract with Verizon Wireless. Rodney Miller, Catawba County’s Finance Director, said that CVBH was the only non-governmental entity receiving this benefit. In fact, he went on to say that the only way CVBH is able to receive this benefit, is by Catawba County & CVBH leading Verizon into believing that CVBH is a county agency. We contacted Verizon, but they refused to make a comment concerning this issue citing possible legal actions. Our investigative team has referred this issue to the North Carolina Attorney General’s Office for review.
Even with all the special treatment and benefits from Catawba County, with the hundreds of dollars in savings that CVBH earns through these incestuous ties, other members of CVBH’s leadership team have the same greedy attitude as Mr. Waters. Chief Administrative Officer, Gail Henson, took home $8,270 more last fiscal year than the previous year – an increase of 15%. Sharon Lynch, the agency’s financial manager, has taken more than $10,946 in raises over the last four years – a 15.7% increase. Donald Mott, Chief Clinical Officer, took home $6,420 more last fiscal year – an increase of 10.24%. Finally, Kelli Carson, the site manager of CVBH’s Burke facility, took home $5,571 more last fiscal year – an increase of 9.5%.
Several current and former CVBH employees have told us that for the last two fiscal years, they were told by CVBH’s leadership team that they would not receive a raise because of the agency facing “hard financial times.” Nonetheless, the leadership team has obviously not held themselves by the same standard. Many of these employees are outraged, but fear loosing their jobs if they raised the issue to their employer.
The current economy and state budget cuts haven’t adversely affected the outrageous salaries of the leadership team at CVBH. “Budget cuts and changes in the State services have affected our ability to serve consumers,” said Gail Henson, spokeswoman for the agency. She went on to tell our investigative team that CVBH has “been forced to downsize” by 13.5 positions. “We are like any business in this economy,” Ms. Henson said, “if revenue falls off we will have to re-look at our options.”
In addition to the 14 positions lost at CVBH, the agency has also terminated services for hundreds of mental health consumers. John Waters, in an email to John Hardy, said that the cuts were due to the fact that CVBH did not receive enough money from Medicaid and Medicare to cover its costs. He said the decision to terminate these individuals was “just business,” a decision that seems to go against the non-profit’s objective of serving the mentally ill. A reasonable person would probably ask themselves, what’s more important, someone who requires mental health services or raising your bottom line to pad your own pocket. Non-profits are not designed to be “just business” they are uniquely different because they serve, in this case, an important humanitarian need.
Our team spoke with Karen, a mental health consumer who was affected by the cuts posed by CVBH. She told us that CVBH notified her in a letter that her services were being cut. They provided her no resources or assistance in locating an alternative provider. Karen, who is on Medicaid and Medicare, said that CVBH told her that they would no longer accept her insurance. That meant the services that she relied on and the medications that she received, came to a crashing halt.
When Karen’s medicine ran out, she found herself in crisis. That crisis landed her in a local hospital for in-patient treatment. She blames CVBH for the crisis. “I don’t think it was fair at all. I felt like they didn’t care. I felt like I was just another number to them,” she said.
Luckily for Karen, she was able to connect with a new provider while she was receiving treatment in the hospital. She said that her new provider was meeting her needs that were previously ignored by CVBH. She’s relying on her family doctor to prescribe the medications she needs to function normally.
When we told Karen about the outrageous salaries of CVBH’s leadership team, she stated: “That makes me sick. Someone making that kind of money and doing that to people, like myself, doesn’t make me feel good at all. They pretty much wasn’t kind. They weren’t kind.”
At the end of the day, Catawba County and CVBH owes an honest answer to the people they serve. Karen and people like her, believe as long as CVBH and it’s leadership team continues to give themselves raises, lay off employees and cut services, their financial problems will continue. Sadly, those most affected are the people who are most vulnerable and those who “mental health reform” was created to protect.
Stay tuned to Catawba Valley Citizen for additional details, as we expose the brokenness of the mental health system in the Catawba Valley – and more importantly how it is affecting those it is suppose to protect.
For more information:
Catawba County Government – www.catawbacountync.gov
Catawba Valley Behavioral Healthcare – www.cvbh.org
Mental Health Partners – www.mentalhealthpartners.org
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I worked for an Area Program throughout the process of “reform” whereby we privatized our services. I can tell you first hand that many of the successful for profits and non profits enjoy their success today because of special treatment, deals, financing and arrangements given by our county government (Pitt County) and our area director at the time who was later fired for incompetence. Most of the agency were and are still headed and staff by ex employees of the Area Program. Sadly these types of articles should have been occuring in 2002-2006 when most of this activity was going on and these businesses were being set up with sweetheart deals while other agencies struggled to stay afloat. This happened ALL OVER THE STATE not just at this particular LME. These agencies continue to enjoy preferential relationships with LMEs that other agencies will never have – they have unlimited access and support while all other agencies are left to figure out the constant system changes, rule doctoring, and financial shenanigans on their own. I wish more papers would take the time to investigate the LMEs as that is where a HUGE part of the problems with the mental health system reside.
When the new Critical Access Behavioral Agencies being called CABHAS are selected you will be able to walk back through their history and find deals exactly like this! DHHS and the LMEs already KNOW who they want as CABHAs – consumers may think things are bad now but wait until they only have 4-5 providers in their entire region!
How are they going to have the ability to choose a provider that is a better fit for their needs when there isn't another provider to choose?
Instead of investigating these things that happened years ago how about investigating what is happening right now in order to stop another atrocity in the “broken” mental health system.
Edited from previous note. Please post this one instead of first one if you do so at all. THANKS!
The article in the Catawba Valley news weekly points out common characteristics (and very similar events!) across many, many communities in North Carolina. In our community, issues of favors and “relational” contracts (with no regard to community outcomes) have ruled the day. I know this to be the case in many LME catchment areas, because the consumers and families who use these systems are quite capable of seeing where public dollars actually go in our communities. And we have corresponded throughout the years of system change. We are not ignorant and have not been throughout the reform years.
Your local officials are in strong company with their peers across the state. Unfortunately, the vision of reform lost its basis in values very early on and there has been a lack of proactive, comprehensive, and long-term planning to sustain NC's reform efforts. As a result, the fiefs have determined their own ways of guarding and providing for their fiefdoms. Some of us call this unethical–but some might call this survival in the absence of strong leadership at the state level and with the tension between the legislature and DHHS throughout much of reform history.
I hope that the current leadership in the Department, the Division chiefs, and the Legislative Oversight Committee all exhale and prepare to take bold actions that will establish firm lines of accountability, eliminate unnecessary administrative overhead (by consolidating systems toward a more efficient model), and value/incorporate the knowledgeable voices of the system's intended beneficiaries as we move out of the muck. Real lives and the quality of them are at stake here.
Laurie Coker
*Consumer, family member,
Former CFAC chair
Recent NC Commission MHDDSAS member (6 years),
Member, Forsyth County Mental Health Collaborative
Current director of NC CANSO ( /but speaking here only for herself)
Very interesting. I am looking forward for parts 2 and 3. One question I have is that CVBH seems to be top heavy. Just how many administrators do they have? When cuts are made….they obviously make the cuts to the staff who are providing direct services. Have they ever thought of cutting an administrator? Of course not….they are still busy giving themselves raises. It would be interesting to see their organizational chart (and the salaries…even recent salary histories if possible).
Thank you for a very interesting story….and all the time spent investigating.
Quite frankly, this story makes a lot out of nothing! John Waters is one of the most ethical, dedicated people in the field of social work and mental health that I have ever met. He has a master's degree, a clinical license, and over 30 years of experience in the field…and people want to crucify him because he makes $66,000 a year?! He has dedicated his entire life to serve the most disadvantaged people in many different communities, and I am outraged by this article. Yes, he does make more money than the average person in Catawba county….well, when a man has a master's degree, a clinical license, and 30 years of experience, I would hope he would make more money than the average citizen in a county where fewer than 20% of people have Bachelor's Degrees and more than half of the people are still in their 20's and 30's! This is just ridiculous!
Beatty, thanks for taking the time to visit the website and to comment on the article. However, the THOUSANDS of people that have read the story in the last 24-hours and the dozens of phone calls and emails we have received, differs with your opinion. I wanted to clarify a few points:
We did not seek, with the article, to raise an issue with someone making a decent wage. We did, however, seek to expose the hypocrisy of a non-profit organization that is being ran like a business – that is putting money & greed before the people that they serve.
You state that Mr. Water's makes $66,000 a year, he doesn't. The agency's latest IRS Form 990 (a form every non-profit must file each year), lists his salary at $86,226. (And that's following about a 5% cut in pay – a cut that was not taken until after our investigative team began filing public records requests for financial records & details concerning his salary) The previous year, Mr. Water's made $90,405 – about 10% more than he had a year earlier.
And, that's not all. The agency deliberately left off members of it's leadership team (what the IRS calls “officers & key employees”) from the 990 form. Our investigative team had to threaten to report the agency to the IRS and other regulatory agencies for them to amend their 990 with accurate information. (That's why you see “amended” versions of the 990 on our website's record repository)
Again, the issue here is not that Mr. Water's has made a career in the mental health industry. The issue is that his agency is suffering financially, laying off employees and terminating services for those who he has worked with for “over 30 years” – and he & those at “the top” of CVBH are taking home raises & record salaries.
When non-profits begin suffering financially, generally those who run them don't get raises – especially raises that would cover a great deal of the salaries of those you are terminating. And, I'm not saying Mr. Water's is unethical but when we have handfuls of his employees telling us that he sent emails out for the last 2 years telling them “no one will be receiving a raise this year” because the agency is “going through difficult financial times” and he turns around and gives himself and his top leaders a raise – that is not only sickening, it's UNETHICAL!
And, all of this comes after our team has been threatened with law suits and has had to fight the “good old boy” system that tries to keep the “dirt swept under the rug.” We simply won't stop telling the truth. Beatty, you can raise good things about anyone named in this article until your face turns blue, but if you would have taken the time to review the public records & statements directly from the mouth of Mr. Waters, Mr. Hardy, Ms. Henson & Mr. Miller – you would see that our team not only raised A LOT about SOMETHING – we have uncovered a dirty little secret that has all of the above mentioned running scared.
(This is where I should mention that CVBH has contacted it's insurance company's attorney to try to suppress our 1st Amendment Rights to report on the facts. Sadly enough, not even threatening emails, phone calls or letters will stop our team. We will continue telling this story until every man, woman and child in the Catawba Valley has access to quality & reliable mental health services free of the special interest of those who pad their own pockets and make deals under the table. Because, at the end of the day, those who suffer the most are the mentally ill & developmentally disabled. They deserve a voice and an advocate – if we are nothing, we want to be that!)
MH Insider, thanks for visiting with us and reading the article. Thank you, especially, for taking time to respond and comment. We value your comments and opinions. I wanted to encourage you to stay tuned to the site, as we will be releasing an investigative piece on Mental Health Partners (the LME for Burke & Catawba counties) in the very near future.
StopTheMadness, thanks for reading & taking the time to comment. You raise a very important point. These issues should have been covered years ago. It is unfortunate that a media outlet has not taken the time to look into the level of “muck” that exists. We are a new outlet (we launched in June 2009).
We decided to focus our investigation on how we, as a community, go ourselves into this mess. If we don't understand where we came from, it's hard to understand where we're going. The foundation of our local mental health system needs to be repaired, before anything else can be built upon it.
Our investigation doesn't seek to make those changes, but it does seek to start dialog about the process and encourage the community to play a part in the process.
Jared, thanks for commenting. We are going to update the article with a table/chart showing the salaries of those individuals named in this story and how they have changed over the course of the organization. As for an organizational chart, I will see if our investigative team has gotten their hands on this. If so, we'll provide a link to that as well.
Stay tuned to the site to see what's coming…
Laurie,
Thanks for taking the time to share your story, however brief, with us. It's important to hear from people who are involved in the system. Know that we understand it's not easy to be bold enough to speak out, but you have – and we appreciate that.
I, personally, agree with your observation. It's important to understand that part of the reason we see the issues outlined in this article, is because of poor leadership at the state level. Mental Health Reform needs to be looked at seriously.
It is our hope that our investigation will help spark conversation concerning reform. We need people, like yourself, speaking up for those who cannot have this conversation – but that need our help.
I am simply appalled at both the greed that would allow CVBH executives to increase their salaries while cutting direct care staff, and at the cuts in services to clients.
If you read some of the source documents via your links, you see that CVBH has stopped seeing clients who have both Medicaid and Medicare because they do not receive enough reimbursement for these clients Bad enough to not be able to get services if you have no insurance, but to be denied because you have Medicare/Medicaid!
An Concerned Citizen, we agree with your observation! Stay tuned for future pieces of this investigation that will address those issues.
I am so glad this story has finally been made public. I too worked at Catawba Mental Health just as the reform was taking shape. Look forward to your future articles.
I think your response is good, and I did think the article said he makes about $66,000 a year–if I misunderstood, I'm sorry. But I have worked directly under John Waters for many years, and he has been very direct on many occasions when he told me that, as a clinical social worker, I am obligated “to help everyone who doesn't have a voice in our community, regardless of ability to pay.” Unless the man himself has changed (after seemingly 30 years of giving these type of instructions to his staff–which would be quite odd for a man to do this, but…), then I would be more compelled to defend the man whose “words straight out of his mouth” directly instructed me to do everything possible to help the most vulnerable people in our community. Also, I can agree that when the top get raises while others don't is wrong; however, I would not say that that this non-profit is really “run like a business” when there are no stock holders, no “profit sharing,” and no one gaining financially (“kickbacks”) for denying services (in fact, I'm confused as to why an agency who relies on Medicaid and Medicare funding would deny people services with this funding–and your article doesn't say, but what you indicate is that all of a sudden, people who had been receiving Medicaid and Medicare funding who still need services have all of a sudden been released from their care…even if that is true, do you know for certain if they tried to find other agencies to take these clients, or if there were some clinical justifications for discharging such consumers?).
Thanks. -Dan (not Pattie) Beatty
Dan,
Thanks for taking the time to reply. Just a couple points:
1) The article stated: “That’s $66,267 more than the average citizen in Catawba County.” This is pointing out that Mr. Waters makes $66,267 MORE THAN the average citizen in Catawba County. In fact, that's almost the average salary of 3 people in this county. And Mr. Waters is running a non-profit organization. What does “non-profit” mean?
2) The words “like any business” come from Gail Henson (Chief Administrative Officer) not us. I agree for-profit corporations have stake holders, etc. CVBH is incorporated under IRS code 501(c)3. But, given the THOUSANDS of dollars & kick backs the top elite of this organization have given themselves, the way they have defrauded a telecommunication company into believe they are a county agency (and there are other pieces of this investigation that may potentially show even more fraud & deception which we have not yet disclosed because of pending legal actions), among other things – I would say that there are individuals definitely “profit sharing” at the cost of the donors and consumers of that organization.
3) The issue with Medicaid and Medicare will be unveiled in more detail in a future report. I will, however, tell you that CVBH was projected to terminate approximately 300+ consumers. Our team has interviewed a handful of those affected. CVBH notified these consumers via postal mail that their services were being terminated. The agency did not offer any assistance in helping these consumers locate alternative services, according to the consumers we interviewed. (CVBH was in compliance with the law, however, by giving the consumers 30-days notice of intent to terminate services.)
Feel free to continue to post your comments and views. Legitimate and honest conversation about this issue needs to occur. Only through honest, open and legitimate conversation can the broken system be repaired.
Thank you so much for your article about Mental Health services in Catawba County. I have worked as a professional in the field serving persons with developmental disabilities and/or mental health challenges for nearly thirty years. I have worked for Area Programs (now referred to as LMEs) as well as for non-profit organizations. Unfortunately, as your article pointed out and as many of your readers have commented, the reform of the mental health service delivery system in North Carolina has been rift with many problems. It is sad that the individuals who need the services are often the people who suffer the most when problems do arise. The State of NC needs real reform that empowers those who need services to have a real voice in the services they want and need and adequate funding (without all the waste, excessive administration, etc.) to have the supports necessary to live meaningful and integrated lives in their home communities.
Perhaps we should ask Barack Obama to appoint a mental health “czar” for Catawba County.
On second thought, that would probably make matters worse.
This isn't a political game. This is a serious issue about real people and real lives. If you can't add legitimately to the issue, keep your comments to yourself. It isn't about Republican or Democrat. It isn't about left or right. It's only about fixing the system that everyone – both sides of the isle – have helped to create. It's going to take a community approach; shedding political views, ideologies and special interests. Real people and real lives hang in the balance.
The real thing to remember is that WE – the people in this community – have sat by and idly allowed this mess to be created. It is just as much our fault, as it is the greedy & selfish people who are in charge of this so-called organization.
As a retired VR Counselor with a mental health caseload and the father of an Area Supervisor for a
mental health agency, I am fully aware of the situation addressed. It is my belief, however, that
individuals, like you, who can't take a joke, only add to the problem.
As a past employee of CVBH, who left two years ago when I realized that the clients come last, I can only say THANK YOU for exposing them for what they really are. To this day, I worry about my past clients and hope the best for each of them.
Dan you have worked in the field and you should know the truth. Due to State changes consumers are losing serivces. This can not be denied. Also you can not deny that CVBH and other spin-offs across the state operate and continue to operate as a result of the Area Authority they orginated. I worked for alarge private state wide organization and have dealt with many organizations such as CVBH. As one comment stated this article is years late. This sort of operation was rampant a few years back. some still operate and receive referrals due to their ties with the LME. As a provider we have had to lay off professional staff and also have had pay decreased due to the State budget cuts.
This is not a joking matter. Anyone with the credentials you cite should be more interested in speaking to the issue rather than taking another opportunity to make your extremist political statements. It is insensitivity such as expressed in your posts here that add to and likely created the problem.
Literally lives are at stake here. Not the time for jokes.
Even though Critical Access Behavioral Agencies (CABHAS) are coming there is a bigger issue that will allow agencies such as CVBH to continue. That issue is the Waivers that will be statewide similar to what Piedmont. If you are not familiar that area has its own Medicaid plan set up as a waiver. No big deal accept that they determine who the providers in their area will be. There is no choice for the consumer. They can allow as few or as many providers. Put simply Catawba would be able to say CVBH and only CVBH is the mental health provider.Eventually all LME's will have their own waiver. People with disabilities will not have the choice the LME's will have the choice. People with disabilities will no longer have advocates within providerr agencies as providers will have to suck up to maintain contracts. How about investigating as it will have profound effects on people going forward.