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A deal to save Wilmington’s only state-funded detox center is dying on the vine

Benjamin Schachtman
The Harbor

This week, Wilmington is losing a critical tool for dealing with mental health crises and substance abuse. Despite having several key stakeholders on board, a deal to save it appears to be falling apart.

Update Friday, Oct. 23 - On Friday evening, RHA issued a statement to WECT. Upon request, RHA provided the same statement to WHQR. RHA did not elaborate on the statement or provide answers to other questions about The Harbor. 

RHA's stated: "Until further notice, The Harbor will remain open and continue to receive admissions. RHA is continuing its efforts to maintain this vital resource for the community. We appreciate all of the support that The Harbor has received from community stakeholders and private citizens throughout the area."

At stake is the The Harbor, a 16-bed detox and crisis facility that annually treats hundreds of people dealing with dangerous withdrawal and mental health situations. The Harbor is crucial because it’s the region’s only state-funded detox and crisis center, meaning for the uninsured and under-insured, it’s their only local option. On Friday, October 23, the facility will stop accepting patients.

The Harbor isn’t the only detox option in the area — there are private facilities and New Hanover Regional Medical Center’s emergency room — but it is the only place for Medicaid patients with staff trained specifically to handle withdrawal and intersecting behavioral health issues.

While the Wilmington-area has a number of affordable and state-funded or state-subsidized treatment options, for many lower-income patients the Harbor’s beds are the only way to get to one of the facilities.

The Harbor faces several problems, set against the complicated and uncertain background of large-scale changes in healthcare.

The most immediate issue is fairly simple: The Harbor’s lease is up.

Since it was founded a decade ago, The Harbor sat on New Hanover County property, but the parcel was sold to NHRMC in 2017 and the property was conveyed to the hospital earlier this year. The hospital has since granted Asheville-based RHA Behavior Health, which operates the facility, two extensions.

A third extension for up to six months is on the table, but with a condition: NHRMC needs to see a written plan for a future home from RHA. Despite repeated pleas from stakeholders, including officials from New Hanover County and a community group that’s gathered over 20,000 signatures on a petition, RHA has yet to deliver any such plan, according to the hospital. RHA did not respond to repeated requested for comment on what, if any, medium-range plans it had for relocating The Harbor.

New Hanover County Commissioner Rob Zapple, who has been tracking efforts to save The Harbor, said that despite repeated promises from RHA that a written plan is forthcoming over the last several weeks, it still hasn’t materialized.

“Guys, there’s a ticking clock here, you’re going to run out of time. Write the darn email,” Zapple said, paraphrasing his conversations with RHA.

Zapple emphasized that the county and hospital were both on board.

“Everybody is pulling on the same rope, we all want the harbor to continue to serve and those 16 beds to be here in New Hanover County and we’re all working to that end. Right now the missing link is direct conversation between the hospital and RHA,” Zapple said.

Beyond The Harbor’s lease, there are other, longer-term issues --- the most dire being funding.

There are several locations around the Wilmington area where RHA could relocate The Harbor, including the Harrelson Center in downtown Wilmington. No matter where The Harbor moves, it would likely require upfit to bring it up to required medical standards. But that initial cost is only part of the problem.

Long-rang funding is wrapped up in the deeper uncertainties of North Carolina’s shift to a new form of Medicaid funding.

Right now, The Harbor receives funding from Trillium, the managed care organization that disburses state and federal funding in 26 counties across eastern and coastal North Carolina. According to Trillium, the new Standard Plans for Medicaid, which will go into effect at the beginning of the next fiscal year (July 1, 2021), means “Trillium will no longer be the primary or sole funder for these types of services.”

The rollout of a new plans for Medicaid shifts some funding responsibility from MCOs like Trillium to insurance companies. And, right now, it’s not clear exactly how that will impact facilities like the Harbor.

Both RHA’s local management and its corporate headquarters declined to comment on this uncertainty, but Trillium did, earlier this year.

According to Trillium, “RHA made the decision that the funding picture was too uncertain to commit to the long-term lease and capital expenditures necessary to relocate the service to a different physical location.”

The structure of Medicaid funding isn’t the only change that might impact The Harbor.

While RHA Health Services Inc. is a registered non-profit, it’s been owned by at least two different private equity firms over the last five years. In 2015 the international firm Safanad and Atlanta-based Formational Capital acquired RHA. Over the next four years, reportedly doubled RHA’s earnings, although it does not appear to have been a smooth ride.

Non-profit tax return records maintained by ProPublica show that RHA was losing roughly a million dollars annually in the years prior to the acquisition by Safanad and Formation; two years after the acquisition, RHA was out of the red with net assets nearing $2 million. But, in 2018, records from show RHA lost a half-million dollars. Tax records from fiscal year 2019 and 2020 aren’t available yet.

In 2019, the firms sold RHA to Blue Wolf, another private equity group, headquartered in New York City; Formation noted their focus on delivering quality healthcare, but the company’s CEO didn’t shy away from noting that focus delivered excellent returns on investment.

Neither Blue Wolf nor RHA responded to questions about whether a change of ownership, or the input of the private equity firm, had any impact on RHA’s long-term commitment to running a detox center in the Wilmington area.