Where’s the money? A local mental health provider takes $1.2 million from the state, doesn’t pay its employees | North Carolina | Indy Week
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Where’s the money? A local mental health provider takes $1.2 million from the state, doesn’t pay its employees 

In the video clip, Will Smith sprawls on the floor of a bathroom stall, clutching his son, on a bed of toilet paper. Tears well in his eyes.

"I remember sleeping in abandoned buildings," a motivational speaker barks. "I remember eating out of garbage cans."

The clip, a portion of the 2006 film Pursuit of Happyness, segues to NBA star Kevin Garnett, sweat dripping from his chin, as he practices his shooting motion. The strings swell. "You do what you've been called to do, what you were born to do. Nobody can do what you do. Are you hearing what I'm saying? You're powerful."

Bilisa Perkins, a former case manager at Family Legacy Mental Health Services in Raleigh, didn't feel inspired as she watched in late August. That's probably because she and other employees were sent a link to YouTube when they inquired about their missing paychecks.

By most accounts, payroll at Family Legacy—which primarily serves poor Medicaid recipients in Durham and Wake counties—has been tumultuous since January. That's when checks began arriving late. In March, they stopping coming at all for case managers, the day-to-day workers who connect clients with services. By May, therapists were missing paychecks, too. Some months, paychecks didn't come at all. Other months, they would bounce, or workers would have to beg for partial cash payments.

Family Legacy's CEO, a Raleigh businesswoman named Lisa Stacey, is offering few answers. She did not respond to multiple interview requests for this story, and employees say that, for months, Stacey has been elusive when they asked about payroll.

"She told me to just have faith in Family Legacy," Perkins says. "But Duke Energy doesn't have faith. They'll cut my lights out."

Today, the clinic remains open. But, aside from the occasional text or email, employees say Stacey's been absent for nearly three weeks, even as her foundering Raleigh and Durham clinics saw more than half of their employees quit.

Several workers who spoke to the INDY reported thousands in missing wages and bounced checks. All of this, if true, is a violation of state and federal labor laws, which require employees to be paid at least monthly.

Family Legacy's staff has dwindled to just five today, down from 12 a few months ago, with a pair of doctors expected to handle dozens of clients. Workers say the exodus has severely impacted the level of care this agency provides to a particularly vulnerable population.

"Therapists stopped going out because they couldn't afford gas," Perkins says.

A representative for the U.S. Department of Labor says the agency is investigating, but at present, Family Legacy remains an authorized public mental health care provider in North Carolina.

This is the seamy underbelly of North Carolina mental health care. According to advocates, facilities such as Family Legacy expose a fundamental lack of state control in North Carolina's system of public mental health care, such as it is, underfunded and creaking.

Alliance Behavioral Healthcare, the managed care organization, or MCO, assigned to manage public mental health services in Durham, Wake, Cumberland and Johnston counties, says it can do nothing for these workers.

"We don't have control over the way a provider interacts with their employees," says Alliance spokesman Doug Fuller. "You can assume how we would feel about it, though."

For the last 15 years, the state has been phasing in a system that hinges upon MCOs like Alliance, which are charged with overseeing and disbursing Medicaid reimbursements to providers. Last week, Republican leadership in the General Assembly approved legislation that will, over the next four years, cede control of Medicaid to private, for-profit companies.

They say it will stabilize the sometimes-unpredictable cost of Medicaid, but most providers believe it will only loosen state control. In fact, they argue, it seems lawmakers' intent is to absolve themselves of responsibility for the system.

Patients will inevitably suffer, they argue. Yet at Family Legacy, patients are already suffering, workers say.

"The person who needs services is once again going to be a victim of the way our state chooses to provide these services," says Vicki Smith, executive director of Disability Rights N.C. "And I want you to use the word 'victims,' because that's what they are."

If you have ever experienced a breakthrough or triumph of any kind, you know that release and joy you feel when it happens. You also most likely know the pressure and pain that comes just before. Just when you think you can't take any more, it happens. It is like that every single time. The birth of my son. Death of my Mother. I'm sure you can think of multiple times, as well. It happens the same way each and every time. Don't you think there is a reason?

"That is why I keep going. Because I know the only way to guarantee failure is to quit. To sit down and surrender to the negativity around you.

"You always have choices.

"Sometimes they aren't easy to make, sometimes they are wrong, but you do own them.

If you choose to be present somewhere, do so to the best of your ability. Do so to benefit others. Build each other up. Tearing one another down and being negative has no place in the world we live in." —Excerpt from Lisa Stacey's email to Family Legacy employees on Sept. 8, around the time their paychecks were supposed to arrive.

Family Legacy, sequestered on the dimly lit second floor of a nondescript brick building off Western Boulevard, is the skeleton of a doctor's office. There's a check-in desk but no receptionist. Buzzing fluorescent lights and a pair of vending machines chug along dutifully. Rote doctor's-office artwork of the bird and flower variety adorns the drab tan walls.

But, today, the patients are gone, and so is Stacey.

Donna Mayo, the clinical director for Family Legacy, offers a weary smile. She hasn't seen Stacey in weeks. "I didn't know what I was coming into when I took this job," she says.

Mayo took over as Family Legacy's clinical director in July. Today, she says she's trying to "do the ethical thing," helping to connect clients with new doctors and therapists. The dwindling staff means Family Legacy cannot serve its own caseload.

Finding a new provider is no easy task. It could take weeks or even months for a patient to see a new doctor or therapist.

According to state records, Family Legacy incorporated in 2007. Since 2011, the IRS has reported almost $289,000 in federal tax liens. In May 2013, the N.C. Secretary of State's office suspended the company's business in the state due to an unspecified complaint from the state Department of Revenue. That suspension was lifted in October 2013.

But according to Alliance, the clinic has continued to receive state Medicaid dollars despite its financial irregularities.

Because Family Legacy is a for-profit, private corporation, its financial dealings are not public record, even though it's authorized (and paid) by the state to provide outpatient therapy, psychiatric evaluations and in-home rehabilitation for Medicaid patients.

So far this year, Family Legacy has been reimbursed for $1.2 million in Medicaid funds. In 2014, the clinic billed the state for about $1.7 million.

"Money is still coming in from Medicaid," says Monica Daye, a former case manager at Family Legacy who says the clinic owes her about $3,000. "Where is it going?"

Daye, like other case managers at Family Legacy, says she began missing paychecks in March.

"It was a known thing in the office when you did get a check," she says. "Race to the bank before the money runs out."

"I've worked in this field for 10 years," says one current Family Legacy employee, who wished to remain anonymous. "I've never seen anything like this."

Tannetta Tucker, another former case manager, says she's owed about $6,700. When Tucker asked about her pay, Stacey accused her of Medicaid fraud, an accusation Tucker emphatically denies.

This wasn't uncommon, workers say. When employees began to aggressively question why they hadn't been paid, Stacey would accuse them of fraud. The accusation allowed her to freeze their pay, which they weren't receiving anyway, during the course of the "investigation."

"She is still operating, but if the state walks in today, wouldn't they shut it down?" asks Tucker. "Why is Alliance allowing them to stay open?"

That's a difficult question to answer.


Even though it operates with public funds, Family Legacy's contract with Alliance Behavioral Healthcare is not public record, according to Alliance spokesman Doug Fuller. How it distributes those public dollars is also off-limits, he says.

If there were allegations that the clinic billed Medicaid for services it did not actually provide, Alliance would aggressively investigate, he adds. But no such allegations have been made.

"It's just a contracted agent doing a job," says Fuller. "We have no control over how an employer interacts with their employees."

For those questions, Fuller directed the INDY to the N.C. Department of Health and Human Services, which oversees the MCOs. A spokeswoman for DHHS, in turn, referred all questions about Family Legacy's payroll to the U.S. Department of Labor, which isn't saying much either.

Richard Blaylock, the Labor Department's district director for North Carolina, says his office began an investigation into Family Legacy in August, with no resolution as of this week.

But while Blaylock declines to discuss the specifics of Family Legacy's ongoing case, he says the agency's probe would be limited to determining what is owed to workers. How Family Legacy spends its Medicaid dollars would remain hidden to the public.

Blaylock says the agency's probes are typically administrative, rather than criminal, investigations, meaning wage complaints are usually resolved without legal action.

"Many times, employers don't understand all the responsibilities they have under federal law," he says.

The department has the power to force employers to pay back wages or pay damages for violating federal labor laws. Should an employer refuse to comply, the department would then file suit against the company.

Disability Rights N.C. says Family Legacy's struggles, and the inevitable impact on mental health care for clients, are embarrassing.

"Any provider agency that's not paying its employees and is primarily funded through Medicaid, you have to wonder where the money's going," says Smith, the executive director. "And the quality would have to suffer in a situation like this. There seems no way that it wouldn't. It's already an underserved population."

State Rep. Verla Insko, D-Orange, has been one of the most outspoken legislators for mental health care reform in the last decade. Insko says she's never heard of a situation quite like this.

"Someone should be doing something about this if someone is absconding with taxpayer dollars," says Insko. She says she's shocked that Alliance hasn't done more. "That's their job," she argues.

Marvin Swartz, head of Duke University's Social and Community Psychiatry Division, says turmoil is nothing new in North Carolina public health. Many publicly funded clinics have struggled to remain open in recent years, partly because Medicaid reimbursements are denied to providers when patients do not show for appointments, a frequent occurrence in the field.

"It's very tough on folks who already have problems when they can't get consistent care," says Swartz. "But a reputable owner or manager would be transparent about these cash-flow problems."

Treatment for this population is an especially problematic—and expensive—problem in North Carolina. In 2012, hospital emergency rooms reported 17,000 more visits for behavioral health issues than in 2010, according to DHHS. And a 2010 report estimated more than $7 million a year was spent boarding such individuals in hospital emergency rooms.

Additionally, the average wait time for admission to overburdened state hospitals or crisis centers was more than three days. Outpatient therapy and diagnosis like the kind supposed to be provided at Family Legacy is vital for alleviating the state's backlog, experts say.

Swartz says a privatized system in North Carolina will need to clearly identify metrics for private companies in order for them to assess providers. That company should have the power in its contract to end its agreement with or at least sanction the provider.

"The clinic is expected to provide a continuum of high-quality care," says Swartz. "And they obviously can't do that in this situation."

Smith agrees. "Who exactly is held responsible when the patient is not getting their needs met?" she asks. "There are lots of red flags here. If the new Medicaid reform doesn't lay out who ultimately is responsible, then it is flawed from the start."

As most of you hopefully know, I am a Christian and a person of immense Faith in God's power, never my own.

"Please understand, I realize everyone does not share my religion, practices, etc. Please do not take offense at this posting. Simply ignore it, if you choose, and go about your day knowing respect is here for all religions/beliefs. I simply wanted to share this for those that were interested this morning.

"I appreciate what you all do on a daily basis.

"We are not exactly where we want to be, but we are growing and striving for betterment on a daily basis. We are creating new systems and streamlining some old ones. Please don't hesitate to point out areas where we can improve as a team as we continue to move forward.

"Have a wonderful day and thank you for your service to our families and community. It's our only reason for existence." —Lisa Stacey, in an Aug. 12 email to Family Legacy staff. She included a link to the website of Christian author Max Lucado, where one can purchase the book The Applause of Heaven.

The "fresh start" was supposed to turn things around, but here was Lisa Stacey—partway through this marathon four-hour session in June—with tears streaming down her face.

For four months, some Family Legacy employees had been working with little to no compensation. Many of them complained that they couldn't pay for their most basic needs: fuel, food, power bills, rent.

Stacey was giving another inspirational talk. Family Legacy needed to come together, she told employees. Let's talk about the future, she said.

"It got nasty very, very quickly," says Danielle Leigh, a former Family Legacy therapist who attended that meeting. (Leigh asked the INDY to not use her full name because she feared it would affect her future employment opportunities.) "People shouting at Lisa, people cursing at Lisa, Lisa breaking down. It was the most appalling thing I've ever seen at an agency. To have your owner standing there, people yelling at her with good reason, and she didn't have any answers."

Leigh was one of the lucky ones, it seems. Several employees say they faced eviction from their homes. Leigh's savings account helped her float by until she left for another job in late July. She says the clinic owes her about $8,000 in pay.

"I love my work, but I love my family more than I love my work," she says. "We just couldn't do it financially."

But the most troubling thing about Family Legacy's case, according to Leigh, is the broader implications for mental health care.

"Half of therapy is self care," she says. "As a therapist, I need to be there fully for my client. If I'm thinking, 'How am I going to pay my rent? Do I have enough gas to get home?' I'm not really listening to my client. We're not doing what we need to do."

This article appeared in print with the headline "Where did all the money go?"


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