Angelica Velazquillo’s fight for mental health care for undocumented immigrants began not in a hospital room but in a busy downtown Charlotte intersection.

In September 2011, Velazquillo, then a 25-year-old undocumented woman brought to the U.S. when she was 4, joined nine protesters who blocked traffic, chanting “undocumented and unafraid.” Charlotte police arrested the group, charging them with impeding traffic and disorderly conduct, offenses that sparked their deportation proceedings.

Their deportations were later dropped and they were ordered to perform community service, a decision the group credited to the public interest in their case.

“It was a turning point,” she says today. “We were taking more of a stance in what was happening. I realized this is continually going to happen until we share our stories.”

Velazquillo is a master’s student in social work at the University of Chicago. She also founded UndocuHealth, a blog that tells the stories of undocumented youth who have been spurned by the U.S. mental health system.

North Carolina may be the next front in Velazquillo’s battle. When Cardinal Innovations, formerly known as Piedmont Behavioral Healthcare, quietly assumed local management of public mental health services in Orange and Chatham counties last April, they brought with them a policy to deny Medicaid reimbursements for the treatment of undocumented immigrants.

Cardinal Innovations is an agency charged with dispensing state and federal Medicaid dollars in a 15-county region that includes Orange and Chatham.

Public health advocates say the move has all but cut off the undocumented communitypegged at 325,000 statewide by the Pew Hispanic Center last yearfrom mental health care. According to those advocates, the move was unwise and, perhaps, illegal. Critics say federal law mandates that health care be offered to all, regardless of citizenship.

“People are human beings, whether they have documentation or not,” Velazquillo says. “They have a right to life and quality of life.”

Agreed, says Martha Olaya-Crowley, chairwoman of the board of directors for Triangle nonprofit El Futuro.

“I would not be surprised if North Carolina found themselves being investigated by the justice department,” says Olaya-Crowley.

El Futuro is one of the few area agencies providing mental health care for the undocumented and Latino community. Without Cardinal’s Medicaid reimbursement, El Futuro must pay for the cost of care itself. The nonprofit declined to offer financial details, but leaders say the organization is losing money.

“Right now, we’re doing everything we can to keep our doors open and treat the people that need it,” says Olaya-Crowley.

Cardinal is key because, as Piedmont Behavioral Healthcare, it was a pilot program for a revamping of North Carolina’s troubled mental health system. The private agency, which launched in a handful of rural counties outside Charlotte, offered a fiscally lean business approach demanded by cost-cutting state lawmakers.

Today, the state funds organizations based on the Cardinal model. Known as “managed care organizations” or MCOs, they distribute public health money to providers who treat low-income residents in need of mental health care.

The MCO method is complicated on paper, but ultimately simple. Low-income residents seeking treatment come to the MCO. The MCO lays out a treatment plan and reimburses contracted mental health providers with state dollars for providing those servicesthat is, for those with a Social Security number.

Cardinal spokeswoman Rachel Porter said Tuesday that undocumented immigrants are “non-qualified aliens and are therefore not eligible for Medicaid assistance or enrollment.”

Porter says the lone exception is an undocumented immigrant in need of emergency treatment.

But Olaya-Crowley says the policy is troubling. She says Cardinal’s actions are denying much-needed services. “For Cardinal or any other health care organization not to look at that is not in the public interest,” she says. “And I think we should hold them accountable. We should aspire to have these services be reimbursable and available to every one of us.”

El Futuro’s reported financial distress is largely unknown, but public officials have begun discussing it. Orange County Commissioner Earl McKee broached the subject at a breakfast meet with state lawmakers last week in Chapel Hill.

McKee tells INDY Week that Cardinal’s policies exacerbate untreated mental illnesses and funnel the undocumented community into expensive treatment in hospital emergency rooms.

“These are human beings,” says McKee. “They are people. They’re not just numbers on the page. If they have legitimate health concerns, those issues should be addressed. Cardinal Innovations, for whatever reason, is not addressing all these issues.”

State Rep. Deb McManus, a Chatham and Lee county Democrat, says it’s imperative that MCOs address undocumented mental health needs.

“Our state schools do not ask if you’re undocumented or not,” McManus says. “And the Hippocratic oath does not refer to citizenship. There’s a responsibility to care for all.”

McManus also points out that North Carolina agriculture, the state’s top industry, is dependent on migrant labor. “As long as our state is needing them, we need to be taking care of them,” she says.

Proponents say MCOs are the present and the future of the state’s mental health care. The advent of MCOs has been spurred by increased Medicaid spending, which, according to the N.C. General Assembly’s Fiscal Research Division, was the fastest-growing budget item as of 2009.

That year, the state budget allocated $3.2 billion in Medicaid spending, roughly 15 percent of the state’s $21.2 billion total operating budget. In 2012, Medicaid costs were closer to $3 billion.

MCOs such as Cardinal have been criticized by mental health advocates who argue they are short-cutting mental health needs, authorizing funding for cheaper treatment methods and side-stepping more expensive services for severe mental illnesses.

“Mental illness is an illness like any other,” says Debra Dihoff, executive director for the state chapter of the National Alliance on Mental Illness. “You want to detect it and get in there early and treat it. When we don’t offer people care, they get more and more sick.”

Dihoff says inadequate mental health resources force the state into expensive options such as treatment in hospital emergency rooms. Police also often have to intervene in mental health situations. Undocumented immigrants may be forced to rely on faith-based charities or groups such as El Futuro that are largely dependent on donations and grants.

“It’s always for the public good to take care of people’s health,” says Dihoff. “Otherwise, it just lands on other public things.”

Agreed, says Mimi Chapman, a social work professor at UNC-Chapel Hill with a focus in mental health and immigration. “When you deny treatment to one group, you’re really creating difficult situations for many groups in society,” Chapman says. “It’s like a chain of dominos.”

The public cost is unclear. UNC Health Care spokesman Tom Hughes says the organization, which operates hospitals in Orange and Chatham, does not track statistics on the number of undocumented immigrants who visit emergency rooms.

Hughes adds that the hospital is legally required to treat everyone who seeks services, regardless of citizenship.

Chapman says research indicates immigrants face unique mental health risks typically associated with migration: trauma from cultural clashes as well as depression and anxiety brought on by family separation, especially among younger Latinos.

A 2011 study from the Centers for Disease Control reported nearly 8 percent of Latino youth attempted suicide in the 12 months prior to the survey. The number was nearly 10 percent for Latino females.

And the undocumented community, beset by fears of being deported, is particularly vulnerable to long-term anxiety and depression, advocates say.

Nevertheless, Cardinal’s policy seems unlikely to change. Fred McClure, a Davidson County commissioner who sits on Cardinal’s board of directors, says the agency is bound by Medicaid law.

“I think Cardinal Innovations is doing a yeoman’s job taking care of health issues for the communities,” he says. “I think they do a great job.”

Regardless of the debate over immigration reform, Olaya-Crowley says treatment for the mentally ill is essential for the common good.

“That is what this is really all about,” she says. “We continue to neglect people who have mental health problems. We continue to put them under the rug and pretend that they will go away or die. They will not.”

This article appeared in print with the headline “Mind games.”