The board of Detroit-Wayne Mental Health Authority voted 7-5 Friday to temporarily suspend a decision earlier this month by CEO Tom Watkins to terminate a contract with Integrated Care Alliance, a Detroit-based developmental disability services provider.
In a Dec. 4 termination letter to ICA, Watkins contended ICA, which was recently acquired by Molina Healthcare, is in violation of four contractual terms. Watkins cited his authority as CEO to sever its $48 million contract with the authority, according to memos obtained by Crain's.
At a meeting this morning, the majority of the 12-member board voted to suspend that decision until at least until Jan. 31. The board also instructed Watkins to hire a lawyer for the board to research breach of contract issues and Watkins' authority to terminate the contract.
The dispute over ICA goes back more than a year, but it came to a head Dec. 4 when Watkins sent ICA/Molina a letter informing that he had decided to terminate its contract, with a 90-day notice.
Watkins explained in memos that two in-house lawyers and Floyd Allen, the authority's outside counsel, advised him he had the authority to terminate the contact and suggested he take quick action after Molina acquired ICA on Oct. 30.
DWMHA memos also indicate that Watkins cited precedence in having the power to terminate contracts. For example, over the past several years, Watkins has terminated contacts with the Wayne County Retirement System, Wayne State University and Eastern Michigan University.
In a statement to Crain's, Molina confirmed it acquired ICA this year. Last year, Molina purchased a 49% minority interest in ICA.
“Molina, through its behavioral health subsidiary, recently acquired 100 percent ownership interest in Integrated Care Alliance,” said the email statement from spokesman Leigh Woodward. Molina is based in Long Beach, Calif., and operates Troy-based Molina Healthcare of Michigan, a Medicaid HMO.
“Molina acquired ICA as part of a broader strategy to integrate physical and behavioral healthcare for the people it serves. ICA is a manager of a Comprehensive Provider Network under contract with the Detroit-Wayne Mental Health Authority.”
During the past year, the DWMHA board and various committees have met multiple times to discuss ICA with Watkins, including at least three times since Molina's late October acquisition of ICA.
It is unclear why several board members support ICA in opposition to Watkins and staff recommendations. Crain's has reached out to Molina and DWMHA Board Chair Herman Smitherman, M.D., for comment.
Last year, ICA was one of several agencies (called "managers of comprehensive provider networks" in the bureaucratic vernacular) to submit proposals for new contracts with the authority. Three MCPNs — ICA, Consumer Link and Community Living Services — provide developmental disability services to the authority, and two other agencies provide mental illness services.
ICA was the lowest ranked of the three developmental disability service agencies and was not recommended by Watkins and staff for a new contract starting Jan. 1. However, the DWMHA board voted last year to offer ICA another contract.
According to memos, DWMHA staff cited four contract violations this year. They are:
Sources who attended the DWMHA meeting said ICA-Molina's legal counsel claimed that a package of information sent out Thursday before the meeting defames and slanders ICA. The counsel reportedly said ICA was not made aware of any breach prior to seeing an email regarding the meeting last night.
Legal counsel reportedly demanded due process and an opportunity to refute Watkin's findings.
Memos state that DWMHA has informed ICA/Molina that it has been been in violation of its contract several times. DWMHA also informed Molina that it has not approved transfer of ICA to Molina.
“We will keep the (board) program and compliance committee apprised of the implementation of the phase out of ICA contract over the next 90 days,” said a memo from Watkins to the board. “As an extra level of oversight we will contract with an advocacy group to monitor the transfer of consumers from ICA/Molina to their new MCPN.”
Molina representatives have not yet responded to requests for comment.
Detroit-Wayne mental health board suspends CEO's decision to terminate contract with Integrated Care Alliance" originally appeared in Crain's Detroit Business
