Charlotte, N.C.-based Cardinal Innovations Healthcare Solutions paid four executives a combined $3.8 million in severance packages, defying state officials' orders, according to a Winston-Salem Journal report.
Mandy Cohen, MD, Secretary of the N.C. Department of Health and Human Services, announced Cardinal's actions in a letter addressed to the co-chairs of legislative oversight healthcare committees.
Dr. Cohen spoke with the co-chairs over the Thanksgiving holiday before ordering for state health officials to temporarily take over Cardinal's operations and remove the Cardinal board of directors on Monday.
Monday marked the last day of employment for the four Cardinal executives, which included Richard Topping, Cardinal's executive director. Mr. Topping was fired by the Cardinal board on Nov. 17, although the board allowed him to remain in his position until Dec. 1. Mr. Topping was paid $1.7 million in severance. The three other executives, who resigned this month, included the company's CIO, COO and CMO.
Cardinal previously said the severance packages for the four executives were contractually scheduled to be paid over two years. Mr. Topping's severance package included two years' worth of salary and long-term compensation.
The severance payments were made "despite explicit instructions to the Cardinal board of directors regarding the lawful management of public funds," according to Dr. Cohen.
Several legislative leaders are encouraging Dr. Cohen to pursue legal action to retrieve the severance package money.
Cardinal Innovations Healthcare is a specialty health plan, serving more than 850,000 individuals with complex needs.