Category Archives: HEALTH

Health Department on the ropes

New director issues first report card: ‘D minus’ at best, says Lenhart

At left, Scott Lenhart, new director of the Pamlico County Health Department; and, Cliff Braly, chairman of the volunteer board that supervises the agency

PAMLICO COUNTY – Feb. 20, at 6:30 p.m. three separate governmental boards will convene – at the same time in the same room – to consider the pros and cons of merging one county agency into another.

The hot topic is the fate of the Pamlico County Health Department – an entity that has seen its share of woes over the past decade, including a revolving door of directors.

The newest Health Department Director, Scott Lenhart, has been on the job two months. In an unprecedented report publicly released Feb. 13, Lenhart wasted no time in lowering the boom.

In fact, the bombshell came in just the second sentence:

“First of all, if I had to give an overall rating for the Pamlico County Health Department, I would give the health department at best a D- rating,” wrote Lenhart.

Taking care not to cast aspersions toward any of this predecessors — or in the direction of current staffers and elected officials – Lenhart cited a ‘cumulative’ effect in which many of the problems have surfaced “over a period of several years, for whatever reason, as the health department lost its primary focus on what public health is all about.”

Despite a laundry list of “several major issues, which need to be addressed immediately in order to remain operational,” Lenhart was quick to praise HOPE Clinic – a separate nonprofit operating from the Health Department – offering free health care and medicine to low income county residents.

“Space is limited because HOPE Clinic is taking up five offices,” explained Lenhart. “We need the HOPE clinic as much as the HOPE Clinic needs us. Their patients are our patients. Both agencies are in need of space.”

Experts and consultants from the North Carolina School of Government – a subset of the University of North Carolina – are expected to offer insights and recommendations during the Monday, Feb. 20 meeting, which is scheduled for a conference room at the Pamlico County Department of Social Services on Old Main Street in Alliance.

Space could be tight, as three entities — the Board of Directors for the Health Department, the Board of Directors for the Department of Social Services, and the Pamlico County Board of Commissioners – will all attend in order to mull over options.

The session, which is open to the public and to the news media, begins at 6:30 p.m. For more information, call the Pamlico County Manager’s Office at (252) 745-3133.

CarolinaEast earns five stars!

Upper echelon of nation’s hospitals

NEW BERN — In the second round of ratings by the Center for Medicare and Medicaid Services, CarolinaEast Medical Center is the only hospital in North Carolina to retain five stars. One of only four in the state following the initial ratings, CarolinaEast now emerges into an elite group – the 1.81 percent of the nation’s hospitals to receive a coveted five stars!

According to the federal government website,
“The overall rating summarizes up to 57 quality measures on Hospital Compare reflecting common conditions that hospitals treat, such as heart attacks or pneumonia. Hospitals may perform more complex services or procedures not reflected in the measures on Hospital Compare. The overall rating shows how well each hospital performed, on average, compared to other hospitals in the U.S. The overall rating ranges from one to five stars. The more stars, the better a hospital performed on the available quality measures. The most common overall rating is 3 stars.”

Hospitals are rated in several areas: Patient safety, clinical outcomes, death rates, core measures including infection rates, readmission rates, timeliness of care and the patient experience.

The information is gathered through mandated patient satisfaction surveys and publicly reported on the Hospital Compare website.

Ray Leggett, who leads CarolinaEast, credits the staff, physicians, and volunteers for the facility’s superior rating.

“This is indeed a milestone in CarolinaEast’s 53 year history,” said Ray Leggett, President and CEO of the organization. “We were very proud of our five star rating with the initial ratings release, but, to retain that level and now be the only hospital in the entire state of North Carolina – one of only 83 hospitals in the country – to receive five stars is quite the accomplishment.”

Of the 106 hospitals in the state evaluated for the star rating, CarolinaEast was the only one to receive five stars. The Center for Medicare and Medicaid Services reported that 24 hospitals achieved four stars; 53 were rated three stars; and, 16 received two stars. There are no one-star hospitals in North Carolina.

Credit Belhaven mayor, NAACP for ‘tenacity and perseverance’ in fight against Vidant

By Betty Murphy

BELHAVEN – Saturday, April 30, may well have been a ‘Come to Jesus’ moment when Belhaven town officials and the NAACP hosted a press conference to announce jointly filed federal complaints — an integral part of the evolving Save Our Hospital movement!

It has been two years since Greenville-based medical behemoth Vidant Health closed Belhaven’s beloved Pungo District Hospital. In most hearts and minds of this rural community (and to many knowledgeable outsiders), Vidant Health never intended to keep Pungo Hospital operating!

It all came to a head on April 30th. Rev. William Barber, leader of the North Carolina NAACP Chapter joined Belhaven Mayor O’Neal in a ‘no holds barred’ media event. The two men jointly announced the filing of a formal Anti-Trust Complaint with U.S. Attorney General Loretta Lynch.

Rev. Barber also filed for an investigation by the U.S. Department of Justice Civil Rights Division into the surprise removal of Superior Court Judge Milton Fitch, Jr. from a case remanded to him, allegedly without notice.

Judge Fitch, who is black, was replaced with a white judge. Was proper court process followed?

O’Neal filed a lengthy and detailed Anti-Trust Complaint citing numerous allegations against Vidant and Pantego Creek, LLC. Several exhibits were included in support of the allegations.

Pungo District Hospital, like many rural hospitals, has been no stranger to financial problems — having filed bankruptcy in 2001.

Facing costs associated with overstaffing, fiscal mismanagement, failure to install federally mandated technology, and a variety of other concerns, the board of directors for Pungo District Hospital desperately sought a way to keep the facility open.

At the same time, Vidant Health was acquiring two area midsize hospitals (in Duplin and Beaufort counties) that were also floundering financially — in amounts far greater than Pungo’s $1.5 million annual deficit.

Rural hospitals are seldom profitable. If they break even, they are doing well.

Some have raised concerns about the current financial status of Vidant Beaufort Hospital, located in Washington. Since 2011, Vidant’s obscure financial reporting has become even worse. Blame an accounting procedure known as ‘Consolidated Reporting’ in which financial data for all of Vidant Health is blended and combined into an indecipherable mush.

Even the individual practices of physicians (outside hospitals) – an entity known as Vidant Medical Group — are no longer reported separately, making a mockery of promises for greater transparency.

More and more pieces of this tangled mess are coming to light. Many believe Belhaven Mayor Adam O’Neal has laid his personal and political life on the line for town residents. Few individuals possess the tenacity and perseverance to take a stand against injustices such as those that have been visited upon Belhaven citizens.

On the other hand, Pantego Creek, LLC, the current owner of the former hospital building and site in Belhaven, is apparently indebted to Vidant.

Records show $50,000 going as seed money to set up an entity for Tax Exempt Status, with another $10,000 for the actual application.

Insiders say a process that should have taken six months instead ended up taking three years, from September 2011 until October 2014.

After several attempts Pantego Creek, LLC. received IRS 501-c-3 status with a specific category, known as Section 509 (a) (3): Supporting Organizations – an organization that is organized and operated exclusively for the benefit of one or more organizations.”

According to the IRS 990 annual reports, the stated mission of Pantego Creek, LLC is to:

“To support Pungo District Hospital …to ensure compliance with the operating agreement signed between Pungo District Hospital and Vidant Medical Center.”

Those familiar with this saga contend Pantego Creek, LLC.’s stated mission and sole purpose as submitted to the IRS became invalid when Vidant Health closed Pungo District Hospital and transferred the property deed to Pantego Creek, LLC.

Pantego Creek’s reluctance to release the property deed to the Town of Belhaven may be a sign that they no longer trust Vidant to live up to its commitment. In June, Vidant plans to open a new Medical Office Building not far from the former hospital.

In a request to the NC Department of Health and Human Services seeking an exemption from the Certificate of Need requirement, Vidant Health stated no new services will be offered and since Vidant intends to pay for the Medical Office Building out of reserve funds, no state oversight should be required.

The initial cost summary submitted estimated the Medical Office Building would cost $4.3 million – a figure that is now reported as closer to $6 million. The property is now deeded to Vidant Medical Group (Physicians) for tax purposes.

There is some question of the utilization of the helipad, which requires stabilization of patients being transferred by helicopter. The fact remains 25,000 individuals are being denied emergency services in a rural area in which life-threatening accidents are a known factor.

There is a sense of urgency here in Belhaven. One member of Pantego Creek, LLC has suggested demolition of the former hospital might be ordered. In recent weeks, an environmental contractor was hired – one of the first steps prior to any demolition.

Town residents have taken this threat seriously and have setup a 24/7 encampment across from the former hospital building, presumably to thwart any bulldozers that might show up.

In 2014, Vidant Health agreed “to contribute an amount up to $800,000” for the express purpose “to demolish and remove all or any improvements…..” to the (hospital) property. Additionally Vidant offered extensive help in vetting a demolition contractor, obtaining a fixed price proposal and assured Pantego Creek, LLC of ‘assistance’ if the price proposal were to exceed the original $800,000 estimate.

It all came to a head on April 30th. Reverend William Barber, State NAACP Head, joined Mayor O’Neal in a Press Conference to end all press conferences. No holds barred! They jointly announced the filing of a formal Anti Trust Complaint with U.S.Attorney General Loretta Lynch to an audience of about 50 residents, NC NAACP representatives and Belhaven town officials.

Rev. Barber filed for an investigation by the U.S. Department of Justice Civil Rights Division into the surprise removal of Superior Court Judge Milton Fitch, Jr. from the case remanded to him, allegedly without notice. Judge Fitch is one of a few minority Judges in Eastern NC. He was replaced with a white judge. Was proper court process followed?

Mayor O’Neal filed a lengthy detailed Anti Trust Complaint citing numerous allegations against Vidant and Pantego Creek, Llc. Several exhibits were included substantiating the allegations. Clean Hands and Transparency are not now and never have been strong suits of Vidant Health.

Health Director resigns

Dennis Harrington, director of the Pamlico County Health Department, resigned last night during a meeting of the Board of Health. Clockwise around the table, beginning, far left: Harrington; board chairman Cliff Braley; and board members Richard Shaw, Steve Pertz, Teresa Scott, Angelo Midgette, Jason Rose, and Ken Heath.

Dennis Harrington, director of the Pamlico County Health Department, resigned last night during a meeting of the Board of Health. Clockwise around the table, beginning, far left: Harrington; board chairman Cliff Braley; and board members Richard Shaw, Steve Pertz, Teresa Scott, Angelo Midgette, Jason Rose, and Ken Heath.

BAYBORO – Citing “medical conditions,” Dennis Harrington, director of the Pamlico County Health Department, submitted a letter of resignation Monday night to an appointed board of local citizens, who are charged with supervising the department.

Harrington is the latest to exit in a revolving door of Pamlico County Health Department leaders who have come and gone over the past decade.

Calling his decision to resign “my fourth retirement,” Harrington joked that “every old war horse gets to the point where they need to get out of the race.”

On April 14, Harrington caught unexpected flak when he threatened to fire two long-time employees in his department – the women not only refused to go quietly but Harrington’s threat also prompted quick rebukes from at least two county commissioners.

The brouhaha triggered a host of comments – from both inside and outside the department — critical of Harrington’s leadership, which ultimately led to his resignation Monday night.

At the time of his resignation, Harrington’s yearly salary was $52,552.

However, in a Memorandum of Understanding dated Feb. 7, 2013, Harrington also received a host of other benefits, not typically bestowed upon other county staffers: A monthly lodging allowance of $1,020; a weekly mileage reimbursement of 50 cents per mile to and from his permanent residence (in Raleigh); and a $25 per day allowance for meals.

CLICK HERE to read the three-page agreement.

After the Board of Health unanimously accepted his resignation, Harrington took the unusual step of proposing a ‘cell phone use’ policy that would, if approved, apply to all Health Department employees.

“It spells out use of your personal cell phone during business hours,” explained Harrington. “I present this for your consideration and adoption tonight, but I that know you guys haven’t seen it or read it yet.”

County Commissioner Kenny Heath quickly nixed that attempt, gaining concurrence from fellow Board of Health members to table the measure until a future meeting.

Insiders — familiar with Harrington’s ill-fated run-in with the two employees — saw his proposed policy as a parting shot to justify his conduct, when he accused at least one of the women for improper use of her cell phone during a ‘webinar’ instructional video.

Heads almost roll in Health Department

Director’s hasty firing threats, later rescinded to ‘Administrative Leave’


BAYBORO – A routine ‘webinar’ (cyberspeak for video instruction that arrives over an Internet connection) turned testy last Thursday, April 14, when Dennis Harrington, director of the Pamlico County Health Department, threatened to fire two veteran employees, Tammy Rodriguez and Vanessa Jackson.

Rodriguez, who has both a Masters degree in Public Health and an MBA, is responsible for inspecting all food service operations. She signs the “Sanitation Grade” certificate, which must be prominently posted in every restaurant – making her signature perhaps the most visible ‘John Hancock’ in Pamlico County.

Jackson, well known in the community, is the receptionist and administrative staffer for Environment Health. That section is housed on the first floor of the Bayboro courthouse, in a large office that also accommodates the Emergency Management Office and the Building Inspections Department.

Rodriguez and Jackson were not interviewed for this story. Insiders familiar with the incident say both women hope to return to their full-time jobs, hopefully exonerated of any wrongdoing. They do not want to comment, for fear of retribution.

Those same sources describe morale among many Health Department employees as “so bad you wouldn’t believe it.’

Reports gleaned from a number of people indicate Harrington apparently became incensed during the webinar when “he saw one of them texting, and the other one was not taking notes like he thought they ought to be doing.”

Harrington later said to one, if not both, of the women: “You’re going to resign or I’m going to fire you by noon.”

In the hours that followed, at least two county commissioners either called or corralled Harrington – who is under paid contract to Pamlico County for his services, and is not technically an employee. When cooler heads prevailed, Harrington agreed to go along with a less severe disciplinary action known as “Administrative Leave” – but only after Rodriguez and Jackson each returned to work on Friday, April 15, demanding either a letter or formal notice of any threatened termination or disciplinary action.

A group of local citizens – appointed by the Pamlico County Commissioners – comprise an entity known as the Board of Health, charged with the oversight of Harrington and of other public health matters.

This newspaper has e-mailed questions and public information requests to both Pamlico County Manager Tim Buck and to Harrington. However, by press time of this newspaper, neither man had responded. One source indicated that Administrative Leave for both Rodriguez and Jackson is in effect thru the end of April.

Personnel matters – particularly those that involve government employees – seldom see the light of day in North Carolina, where existing state law treats most disciplinary actions as off limits to public scrutiny.

For those who may have more information about this episode, we invite them to e-mail their comments to: This newspaper will, under no circumstances, reveal the names or any other information about those who respond.

One courthouse source was blunt in an assessment of the situation:

“Dennis leads by intimidation,” said the person. “You’re scared to speak up, and if you do, you’re out of there. Tammy has too many feathers (credentials) in her hat. They look at her as being a threat to the department’s current leadership.”

Mission Statement
Promote the optimal health of Pamlico County residents through high quality professional services, to foster public Trust, to minimize identified public health risks and to ensure the safety of the environment for future generations.

Precautionary water quality swimming advisory issued for sound-side site in Pamlico County


Precautionary water quality swimming advisory issued for sound-side site in Pamlico County

MOREHEAD CITY – State recreational water quality officials today issued a precautionary advisory warning the public against swimming or coming into contact with the sound-side beach at 1004 Neuse Drive on the Neuse River in Oriental.

The advisory is due to possible public health risks resulting from a malfunctioning wastewater lift station.

The N.C. Division of Water Resources is investigating the incident, which was caused by heavy rainfall and flooding. The spill has ceased, and it is estimated that the collection system lost approximately 15,000 gallons of untreated sewage, some of it might have gone across the beach.

Wastewater discharges increase the risk that contamination is present in the receiving stream, and, in this case, possibly on the beach. Adverse health effects such as diarrhea, abdominal cramps and skin infections could occur if people swim in these areas, and the public is advised to avoid bodily contact with these waters.

Results from initial water quality testing have not returned. However, state officials are recommending people not swim or lie on the beach in the area near the wastewater discharge until the results of water quality tests reveal that the water is within state and federal standards considered safe for swimming.

The Town of Oriental has posted signs in the area informing the public of a recent sewage spill from a nearby lift station.

For more information on the N.C. Recreational Water Quality Program, visit its website at or on @ncrecprgm.



Rural healthcare suffers from broken system, says Belhaven mayor


Adam O’Neal

By Adam O’Neal, Mayor | Town of Belhaven

BELHAVEN — The truth is the Certificate of Need process is broken. I know the big hospitals have said that rural areas need Certificate of Need to keep rural county hospitals open. You know the story of what happened in Belhaven. Our hospital was struggling. A community-organized board decided the best step was to hand it over to Vidant Healthcare — the big hospital system in Greenville.

We thought they would put a handle on the facility appropriately and keep it open to serve patients in the Belhaven area.

We were wrong! Vidant closed our hospital and shifted those services to the hospital they run in Washington — 35 miles away. Since then, we have had several instances of emergency situations where people have died because of the added distance to reach an emergency facility.

We had a community in Belhaven that was willing to find the money and take the chance of reopening the facility on our own. We addressed the problem and found funding to reopen our hospital facility. All along, our lawyers were telling us to not worry about Certificate of Need regulations since we were an existing facility. Everything was going well, and we were encouraged that we would be able to reopen our hospital.

Then we ran into a roadblock. The state regulators for Certificate of Need said we couldn’t reopen the hospital because regulations said it had to be currently operating to get approved.

That’s where we are today. And unless the North Carolina General Assembly finds a way to reform our state’s Certificate of Need laws, a government bureaucrat has the power to keep us from reopening our hospital.

‘Words no longer have meaning’



Editor’s note: U.S. Supreme Court Justice Antonin Scalia makes such a compelling case that this newspaper has opted to print his 7,000-word dissent in its entirety. We are doing so in two parts, with the second installment to appear in our July 9 issue. Phrases that appear in bold italics are the editor’s attempt to make the jurist’s dissent more easily understood by casual readers.

Antonin Scalia

Antonin Scalia

WASHINGTON, D.C. — The Court holds that when the Patient Protection and Affordable Care Act says “Exchange established by the State” it means “Exchange established by the State or the Federal Government.” That is of course quite absurd, and the Court’s 21 pages of explanation make it no less so.

The Patient Protection and Affordable Care Act makes major reforms to the American health-insurance market. It provides, among other things, that every State “shall . . .establish an American Health Benefit Exchange”—a marketplace where people can shop for health-insurance plans. 42 U. S. C. §18031(b)(1). And it provides that if a State does not comply with this instruction, the Secretary of Health and Human Services must “establish and oper­ate such Exchange within the State.” §18041(c)(1). A separate part of the Act—housed in §36B of the Inter­nal Revenue Code—grants “premium tax credits” to subsi­dize certain purchases of health insurance made on Ex­changes. The tax credit consists of “premium assistance amounts” for “coverage months.” 26 U. S. C. §36B(b)(1). An individual has a coverage month only when he is covered by an insurance plan “that was enrolled in through an Exchange established by the State under [§18031].” §36B(c)(2)(A). And the law ties the size of the premium assistance amount to the premiums for health plans which cover the individual “and which were enrolled in through an Exchange established by the State under [§18031].” §36B(b)(2)(A). The premium assistance amount further depends on the cost of certain other insurance plans “of­fered through the same Exchange.” §36B(b)(3)(B)(i).

This case requires us to decide whether someone who buys insurance on an Exchange established by the Secre­tary gets tax credits. You would think the answer would be obvious—so obvious there would hardly be a need for the Supreme Court to hear a case about it. In order to receive any money under §36B, an individual must enroll in an insurance plan through an “Exchange established by the State.” The Secretary of Health and Human Services is not a State. So an Exchange established by the Secre­tary is not an Exchange established by the State—which means people who buy health insurance through such an Exchange get no money under §36B.


Words no longer have meaning if an Exchange that is not established by a State is “established by the State.” It is hard to come up with a clearer way to limit tax credits to state Exchanges than to use the words “established by the State.” And it is hard to come up with a reason to include the words “by the State” other than the purpose of limiting credits to state Exchanges. “[T]he plain, obvious, and rational meaning of a statute is always to be preferred to any curious, narrow, hidden sense that nothing but the exigency of a hard case and the ingenuity and study of an acute and powerful intellect would discover.” Lynch v. Alworth-Stephens Co., 267 U. S. 364, 370 (1925) (internal quotation marks omitted). Under all the usual rules of interpretation, in short, the Government should lose this case. But normal rules of interpretation seem always to yield to the overriding principle of the present Court: The Affordable Care Act must be saved.

The Court interprets §36B to award tax credits on both federal and state Exchanges. It accepts that the “most natural sense” of the phrase “Exchange established by the State” is an Exchange established by a State. Ante, at 11. (Understatement, thy name is an opinion on the Affordable Care Act!) Yet the opinion continues, with no sem­blance of shame, that “it is also possible that the phrase refers to all Exchanges—both State and Federal.” Ante, at 13. (Impossible possibility, thy name is an opinion on the Affordable Care Act!) The Court claims that “the context and structure of the Act compel [it] to depart from wha twould otherwise be the most natural reading of the perti­nent statutory phrase.” Ante, at 21.

I wholeheartedly agree with the Court that sound inter­pretation requires paying attention to the whole law, not homing in on isolated words or even isolated sections. Context always matters. Let us not forget, however, why context matters: It is a tool for understanding the terms of the law, not an excuse for rewriting them.

Any effort to understand rather than to rewrite a law must accept and apply the presumption that lawmakers use words in “their natural and ordinary signification.” Pensacola Telegraph Co. v. Western Union Telegraph Co., 96 U. S. 1, 12 (1878). Ordinary connotation does not always prevail, but the more unnatural the proposed interpretation of a law, the more compelling the contextual evidence must be to show that it is correct. Today’s interpretation is not merely unnatural; it is unheard of. Who would ever have dreamt that “Exchange established by the State” means “Exchange established by the State or the Federal Government”? Little short of an express statu­tory definition could justify adopting this singular reading.

Yet the only pertinent definition here provides that “State” means “each of the 50 States and the District of Colum­bia.” 42 U. S. C. §18024(d). Because the Secretary is neither one of the 50 States nor the District of Columbia, that definition positively contradicts the eccentric theory that an Exchange established by the Secretary has been established by the State.

Far from offering the overwhelming evidence of meaning needed to justify the Court’s interpretation, other contex­tual clues undermine it at every turn. To begin with, other parts of the Act sharply distinguish between the establishment of an Exchange by a State and the estab­lishment of an Exchange by the Federal Government. The States’ authority to set up Exchanges comes from one provision, §18031(b); the Secretary’s authority comes from an entirely different provision, §18041(c). Funding for States to establish Exchanges comes from one part of the law, §18031(a); funding for the Secretary to establish Exchanges comes from an entirely different part of the law, §18121. States generally run state-created Ex­changes; the Secretary generally runs federally created Exchanges. §18041(b)–(c). And the Secretary’s authority to set up an Exchange in a State depends upon the State’s“[f]ailure to establish [an] Exchange.” §18041(c) (empha­sis added). Provisions such as these destroy any pretense that a federal Exchange is in some sense also established by a State.

Reading the rest of the Act also confirms that, as rele­vant here, there are only two ways to set up an Exchange in a State: establishment by a State and establishment by the Secretary. §§18031(b), 18041(c). So saying that an Exchange established by the Federal Government is “es­tablished by the State” goes beyond giving words bizarre meanings; it leaves the limiting phrase “by the State” with no operative effect at all. That is a stark violation of the elementary principle that requires an interpreter “to give effect, if possible, to every clause and word of a statute.” Montclair v. Ramsdell, 107 U. S. 147, 152 (1883). In weighing this argument, it is well to remember the differ­ence between giving a term a meaning that duplicates another part of the law, and giving a term no meaning at all. Lawmakers sometimes repeat themselves—whether out of a desire to add emphasis, a sense of belt-and-­suspenders caution, or a lawyerly penchant for doublets (aid and abet, cease and desist, null and void). Lawmak­ers do not, however, tend to use terms that “have no oper­ation at all.” Marbury v. Madison, 1 Cranch 137, 174 (1803). So while the rule against treating a term as a redundancy is far from categorical, the rule against treat­ing it as a nullity is as close to absolute as interpretive principles get. The Court’s reading does not merely give “by the State” a duplicative effect; it causes the phrase to have no effect whatever.

Making matters worse, the reader of the whole Act will come across a number of provisions beyond §36B that refer to the establishment of Exchanges by States. Adopting the Court’s interpretation means nullifying the term “by the State” not just once, but again and again throughout the Act. Consider for the moment only those parts of the Act that mention an “Exchange established by the State” in connection with tax credits:

  • The formula for calculating the amount of the tax credit, as already explained, twice mentions “an Ex­change established by the State.” 26 U. S. C. §36B(b)(2)(A), (c)(2)(A)(i).
  • The Act directs States to screen children for eligibility for “[tax credits] under section 36B” and for “any other assistance or subsidies available for coverage ob­tained through” an “Exchange established by the State.” 42 U. S. C. §1396w–3(b)(1)(B)–(C).
  • The Act requires “an Exchange established by the State” to use a “secure electronic interface” to deter­mine eligibility for (among other things) tax credits. §1396w–3(b)(1)(D).
  • The Act authorizes “an Exchange established by the State” to make arrangements under which other state agencies “determine whether a State resident is eligi­ble for [tax credits] under section 36B.” §1396w–3(b)(2).
  • The Act directs States to operate Web sites that allow anyone “who is eligible to receive [tax credits] under section 36B” to compare insurance plans offered through “an Exchange established by the State.” §1396w–3(b)(4).
  • One of the Act’s provisions addresses the enrollment of certain children in health plans “offered through an Exchange established by the State” and then discusses the eligibility of these children for tax credits. §1397ee(d)(3)(B).

It is bad enough for a court to cross out “by the State” once. But seven times?

Congress did not, by the way, repeat “Exchange estab­lished by the State under [§18031]” by rote throughout the Act. Quite the contrary, clause after clause of the law uses a more general term such as “Exchange” or “Exchange established under [§18031].” See, e.g., 42 U. S. C. §§18031(k), 18033; 26 U. S. C. §6055. It is common sense that any speaker who says “Exchange” some of the time, but “Exchange established by the State” the rest of the time, probably means something by the contrast.

Equating establishment “by the State” with establish­ment by the Federal Government makes nonsense of other parts of the Act. The Act requires States to ensure (on pain of losing Medicaid funding) that any “Exchange established by the State” uses a “secure electronic inter­face” to determine an individual’s eligibility for various benefits (including tax credits). 42 U. S. C. §1396w– 3(b)(1)(D). How could a State control the type of electronic interface used by a federal Exchange? The Act allows a State to control contracting decisions made by “an Ex­change established by the State.” §18031(f)(3). Why would a State get to control the contracting decisions of a federal Exchange? The Act also provides “Assistance to States to establish American Health Benefit Exchanges” and directs the Secretary to renew this funding “if the State . . . is making progress . . . toward . . . establishing an Exchange.” §18031(a). Does a State that refuses to set up an Exchange still receive this funding, on the premise that Exchanges established by the Federal Government are really established by States? It is presumably in order to avoid these questions that the Court concludes that federal Exchanges count as state Exchanges only “for purposes of the tax credits.” Ante, at 13. (Contrivance, thy name is an opinion on the Affordable Care Act!)

It is probably piling on to add that the Congress that wrote the Affordable Care Act knew how to equate two different types of Exchanges when it wanted to do so. The Act includes a clause providing that “[a] territory that . . . establishes . . . an Exchange . . . shall be treated as a State” for certain purposes. §18043(a) (emphasis added). Tellingly, it does not include a comparable clause provid­ing that the Secretary shall be treated as a State for pur­poses of §36B when she establishes an Exchange.

Faced with overwhelming confirmation that “Exchange established by the State” means what it looks like it means, the Court comes up with argument after feeble argument to support its contrary interpretation. None of its tries comes close to establishing the implausible con­clusion that Congress used “by the State” to mean “by the State or not by the State.” The Court emphasizes that if a State does not set up an Exchange, the Secretary must establish “such Exchange.” §18041(c). It claims that the word “such” implies that federal and state Exchanges are “the same.” Ante, at 13. To see the error in this reasoning, one need only consider a parallel provision from our Constitution: “The Times, Places and Manner of holding Elections for Senators and Representatives, shall be prescribed in each State by the Legislature thereof; but the Congress may at any time by Law make or alter such Regulations.” Art. I, §4, cl. 1 (emphasis added). Just as the Affordable Care Act directs States to establish Exchanges while allowing the Secre­tary to establish “such Exchange” as a fallback, the Elec­tions Clause directs state legislatures to prescribe election regulations while allowing Congress to make “such Regu­lations” as a fallback. Would anybody refer to an election regulation made by Congress as a “regulation prescribed by the state legislature”? Would anybody say that a fed­eral election law and a state election law are in all re­spects equivalent? Of course not. The word “such” does not help the Court one whit. The Court’s argument also overlooks the rudimentary principle that a specific provi­sion governs a general one. Even if it were true that the term “such Exchange” in §18041(c) implies that federal and state Exchanges are the same in general, the term“established by the State” in §36B makes plain that they differ when it comes to tax credits in particular.

The Court’s next bit of interpretive jiggery-pokery in­volves other parts of the Act that purportedly presuppose the availability of tax credits on both federal and state Exchanges. Ante, at 13–14. It is curious that the Court is willing to subordinate the express words of the section that grants tax credits to the mere implications of other provisions with only tangential connections to tax credits. One would think that interpretation would work the other way around. In any event, each of the provisions men­tioned by the Court is perfectly consistent with limiting tax credits to state Exchanges. One of them says that the minimum functions of an Exchange include (alongside several tasks that have nothing to do with tax credits) setting up an electronic calculator that shows “the actual cost of coverage after the application of any premium tax credit.” 42 U. S. C. §18031(d)(4)(G). What stops a federal Exchange’s electronic calculator from telling a customer that his tax credit is zero? Another provision requires an Exchange’s outreach program to educate the public about health plans, to facilitate enrollment, and to “distribute fair and impartial information” about enrollment and “the availability of premium tax credits.” §18031(i)(3)(B).What stops a federal Exchange’s outreach program from fairly and impartially telling customers that no tax credits are available? A third provision requires an Exchange to report information about each insurance plan sold—including level of coverage, premium, name of the insured, and “amount of any advance payment” of the tax credit.26 U. S. C. §36B(f)(3). What stops a federal Exchange’s report from confirming that no tax credits have been paid out?

The Court persists that these provisions “would make little sense” if no tax credits were available on federal Exchanges. Ante, at 14. Even if that observation were true, it would show only oddity, not ambiguity. Laws often include unusual or mismatched provisions. The Affordable Care Act spans 900 pages; it would be amazing if its provisions all lined up perfectly with each other. This Court “does not revise legislation . . . just because the text as written creates an apparent anomaly.” Michigan

v. Bay Mills Indian Community, 572 U. S. ___, ___ (2014) (slip op., at 10). At any rate, the provisions cited by the Court are not particularly unusual. Each requires an Exchange to perform a standardized series of tasks, some aspects of which relate in some way to tax credits. It is entirely natural for slight mismatches to occur when, as here, lawmakers draft “a single statutory provision” to cover “different kinds” of situations. Robers v. United States, 572 U. S. ___, ___ (2014) (slip op., at 4). Lawmak­ers need not, and often do not, “write extra language specifically exempting, phrase by phrase, applications in respect to which a portion of a phrase is not needed.” Ibid.

Part II of Scalia’s dissent will appear here next week in the July 9 issue of the County Compass.

Kickbacks, misdeeds alleged at regional mental health agency


Click for full report

BEULAVILLE – Rampant graft and corruption in a mental health agency serving a dozen eastern North Carolina counties has been alleged in a State Auditor’s report released last week.

Eastpointe Human Services is a Managed Care Organization, one of nine in the state once known as Local Management Entities. These agencies are charged with the difficult – and costly tasks – of providing mental health care for low-income populations.

In recent years, large staffs and huge budgets have become the stock in trade for these mental health agencies.

In 2014, for example, Eastpointe’s budget exceeded a whopping $300 million. Eastpointe serves 12 eastern North Carolina counties: Bladen, Columbus, Duplin, Edgecombe, Greene, Lenoir, Nash, Robeson, Sampson, Scotland, Wayne, and Wilson.

The state audit reveals that big wads of funding apparently became difficult to resist for the executive at Eastpointe, who was supposed to be a good steward of disbursements – one Bob Canupp.

Canupp is the former Chief Financial Officer of Eastpointe. The state audit repeatedly refers to him as Eastpointe’s ‘former CFO’ but never officially identifies the agency employee. However, existing Eastpointe records confirm Canupp directed Eastpointe’s finances during the period of alleged wrongdoing.

The audit details 11 separate ‘findings’ – replete with allegations of fraud and possible criminal behavior.

Just the opening sentences of Finding Number One, which describe an alleged kickback scheme, are sufficient to knock the socks off almost every North Carolina taxpayer:

The former Chief Financial Officer’s (CFO) unilateral hiring of two contractors, approval of their invoices and payments, together with subsequent payments from the two contractors to the former CFO was consistent with a kickback scheme. The former CFO may have violated several state laws including fraud, misrepresentation, and obtaining property by false pretenses.

As a result, the funding available to North Carolina residents in need of mental health or substance abuse services was reduced by a corresponding dollar amount.

From January 2010 to December 2013, Eastpointe paid two contractors a total of $1,030,420 for renovations to Eastpointe buildings. The two contractors then paid a total of $547,595 to the former CFO from the payments they received from Eastpointe.

State Auditors Report

Rating service says outlook ‘negative’ for Vidant

1a6a092b-2f5c-4301-9705-6f99fce503a7Moody’s Investor Service

NEW YORK CITY — Moody’s Investors Service assigned an A1 rating to Vidant Health’s $278 million Health Care Facilities Revenue Series 2015 Bonds to be issued by the North Carolina Medical Care Commission. The final maturity of the bonds is 2045. The rating service also affirmed an A1 rating for Vidant’s outstanding, previously issued debt.

The outlook for Vidant has been revised to negative from stable.


The A1 rating is attributable to Vidant’s strong market share across multiple counties in eastern North Carolina, its status as a regional referral center for the area, and stable operating performance.

These strengths are offset by the large increase in debt outstanding, resulting in high balance sheet leverage, particularly when considering the unfunded pension liability, and expectations of low organic revenue growth and challenging demographics in the service area.


Revision in the outlook to negative reflects our expectation that balance sheet leverage will remain high for several years, and that operating cash flow growth will be minimal, resulting in a slow de-leveraging of the balance sheet.

Editor’s note: Vidant, with headquarters in Greenville, operates eight hospitals and numerous related medical facilities throughout eastern North Carolina. The bonds described above will be used to 1) construct a new cancer hospital, 2) provide $39 million reimbursement for prior capital expenditures, and 3) pay the costs issuing the bonds.