Two men in very different situations were just a few blocks from each other Monday talking about the same organization – Cardinal Innovations Healthcare. The former CEO who was pushed out during a state takeover of the behavioral health care organization late last year, was arguing in court that takeover was illegal. Last weekend, the state returned control of Cardinal to a new board of directors and CEO. That man is leading the organization that serves 20 counties through a culture change. One that he says will be transparent and put patients first.
Trey Sutten, the new interim CEO of Cardinal, says he’s trying to do so by changing the culture at the organization that serves people with mental health, substance abuse and intellectual and developmental disabilities.
“What’s become clear to me is that there is a culture of fear here. Fear of making the wrong decision. Fear of retribution. That’s part of the culture change that I intend to drive," said Sutten.
Multiple employees who worked for his predecessor, Richard Topping, told WFAE they felt that fear. Sutten says he wants better communication with employees and the state health department. He has committed to monthly meetings with the head of the Medicaid division, who is also a former boss. Sutten used to work for the state health department as the CFO of the state’s Medicaid program.
Olgin: Are there other specific things you are planning to be more transparent about?
Sutten: Yes, absolutely. They range from the micro all the way up to the macro. One example is in the past, we haven’t published board minutes on the website. Finding certain information on the website was difficult. A lot of that is going to change. I know that we are either close or we already have published all of our open minutes on our website. Again, operate in a transparent fashion with regard to provide our member communications is also important.
Details of past board meetings before the state took over in late November were released only by request. Those minutes provided little insight into what happened. The state held the previous Cardinal board of directors culpable for approving the excessive CEO pay totaling about $1.2 million and golden parachute severance packages that were detailed in multiple state audits. The new interim CEO Sutten said he will continue to work closely with the board, but members will still have access to other employees.
"I think what you’ll see is a much larger role for compliance and an internal audit. You will likely see a much more prominent role of the general counsel reporting directly to the board," Sutten said. "What I want to do is I want to make sure that the board has more direct access to the organization through a number of different channels, so that information free flows. And, listen, this gets at the point of transparency and communication too. It is consistent with that theme. The more folks that are talking, the less likely something bad will happen."
The new board has signed an agreement with Sutten to stay on as CEO for at least 12 months. And consistent with state guidelines he will make about $234,000. In December, the state raised the maximum salary for CEO’s of all seven behavioral healthcare organizations. His severance would cap out at 12 months. The previous CEO had a contract that had up to three year’s severance and tied the other executive’s loyalty to him. So when he left, three other executives left and Cardinal paid out about $3.8 million in severance. The organization is dedicated to reinvesting that amount of money from administrative dollars back into the community. The details of that plan will be released later this week.
Olgin: I know there are a lot of people on the waiting list. And so I’m just wondering is that at all what you want to spend that $3.8 million or other money on?
Sutten: Yeah, I mean I certainly think that $3.8 million and other community investments will help some of those folks. What I will also say is we are working on some things right now that will enable Cardinal to be in better contact with folks that are on the waiting list. And so that they don’t actually need to, it’s not just a slot that would eventually get. But there are things we can be doing for those folks currently. And we already are doing some of that work. The team has recently briefed me at a high level about some of the initiatives that we are rolling out about how to connect with those folks and get them connected to service providers with dollars that are available.
Sutten said that the days of charter flights, out-of-state board retreats and fancy holiday parties are over. He’s turning his attention to employees and the people Cardinal serves. Sutten said being open to criticism and feedback is how he can figure out what is working well and what isn’t.
The state is seeking a preliminary injunction against former CEO Topping and former board members to keep them from interfering with the new leadership and board. Topping and former board members maintain the state acted outside of its authority when it took over the organization last November. He offered to testify about his view of Cardinal and its relationship with the state, but the judge declined. The judge is considering the matter and said he plans to rule this week.
Editors note: This story has been changed to clarify that the state raised the maximum salary for all CEO’s of Local Managment Entities Managed Care Organizations not just Cardinal.