CEO of mental health agency retiring; state audit report due soon

jcheves@herald-leader.comDecember 13, 2012 

Shannon Ware, president and CEO spoke during the board of directors of Bluegrass Regional Mental Health-Mental Retardation Board meeting at Coldstream Research Campus, in Lexington, Ky., on June 14, 2012. Photo by Pablo Alcala | Staff


The chief executive officer of Central Kentucky's state-backed provider of mental health care is stepping down as state auditors prepare to release a report on her agency's spending, hiring and management.

Shannon Ware told state officials last week that she plans to retire Dec. 31 after four years at the helm of the Bluegrass Regional Mental Health-Mental Retardation Board.

Bluegrass is chiefly funded by the Kentucky Cabinet for Health and Family Services, which last year paid it $126 million, plus $32 million in Medicaid. Bluegrass manages the state-owned Eastern State Hospital in Lexington and Oakwood in Somerset.

State Auditor Adam Edelen's office is finishing a review of Bluegrass that was prompted by stories published in the Lexington Herald-Leader in June. A report from the auditor's office is expected in the next two weeks, spokeswoman Stephenie Steitzer said Thursday.

The Herald-Leader reported that Bluegrass spent plentifully on executive compensation for Ware and others, and for political lobbying and real estate, while citing tight budgets to its front-line employees, many of whom complained about low pay, no raises and austere working conditions. Bluegrass's annual revenue more than doubled over the past six years to $176 million as it expanded and won more state contracts.

The Herald-Leader also reported that Bluegrass's executive payroll included Ware; her husband, Joseph Toy, who was her predecessor as CEO and remained as a paid consultant; and their son-in-law, Eric Crabtree, the director of information technology.

In 2010, Ware and Toy together took home more than $1 million in total compensation, including $377,637 in base salary, bonuses and payouts from a deferred-compensation plan for top Bluegrass executives. By contrast, many of the agency's rank-and-file employees who worked directly with patients earned between $20,000 and $35,000, according to the agency's payroll database.

Since 2008, Bluegrass has spent at least $486,156 to retain four lobbyists at the state Capitol. In 2006, it bought a $295,000 home near Lake Cumberland for its "senior management team" to use while working in Somerset.

Two weeks after the Herald-Leader's stories were published, the Bluegrass board of directors acknowledged "a bad morale problem" among its 2,300 employees and awarded a round of bonuses and pay raises.

Ware declined to comment this week on her departure, as did Scott Gould, chairman of the Bluegrass board of directors.

"My tenure at Bluegrass has been an extraordinary journey where I have been blessed to know so many individuals who overcome challenges, endure the difficulties presented by severe mental illness, substance abuse and intellectual or developmental disabilities, and who never give up hope," Ware wrote Dec. 10 in a letter to the Cabinet for Health and Family Services announcing her retirement.

David Hanna, a vice president at Bluegrass, will be interim CEO until a permanent replacement can be named, Ware told the cabinet. Hanna declined to comment Thursday, referring questions to Ware.

Anthony Wilhoit, who served four years on the Bluegrass board before stepping down recently, said Ware's departure was unexpected.

"I was really surprised to hear of this," Wilhoit said. "I found her to be a pretty effective CEO. Some things were pointed out to us in the newspaper this year about our operations — some loose ends that we needed to tend to — but overall, I thought her management was pretty good."

Mental health advocates have generally praised the work of Bluegrass.

"I'd have to put them high up on the star chart in terms of what they provide their consumers and their family members," Sheila Schuster, executive director of the Kentucky Mental Health Coalition, said in June. "It's one thing to deliver quality care, but I feel that Bluegrass goes the extra mile."

John Cheves: (859) 231-3266. Twitter: @BGPolitics. Blog:

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