July 12, 2017

AG sues Presbyterian over millions in alleged unpaid taxes

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New Mexico’s Attorney General says one of the state’s largest healthcare providers committed fraud by deliberately underpaying taxes for over a decade by falsifying Medicaid deductions and credits.

Attorney General Hector Balderas filed the claim in state court in Santa Fe Tuesday, alleging that Presbyterian Health Plan, Inc. and Presbyterian Healthcare Services filed claims for tax deductions and credits related to Medicaid for above what the company qualified for between 2001 and 2015.

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The suit refers to Presbyterian’s actions as “systemic and deliberate.”

“When insurance providers break the rules, they must face consequences,” Balderas said in a statement released by his office. “My office is working with the State Auditor to make sure that Presbyterian—and any other companies that engaged in similar fraudulent conduct—are held responsible for the serious injuries imposed on New Mexican taxpayers.”

Meanwhile, a separate audit of premium tax collections continues, State Auditor Tim Keller said in a statement.

In a statement to NM Political Report, a spokeswoman said Presbyterian is “confident that we have acted in good faith and with the intent to comply with our legal obligations and responsibilities” and said the company “vehemently reject[s] the allegations made today and we look forward to a positive resolution to this matter.”

“We are genuinely alarmed and surprised by the timing and nature of these allegations,” the emailed statement from Communications Manager Melanie Mozes said. “The premium taxes paid by Presbyterian Health Plan have been audited multiple times by independent firms and state agencies. We have consistently and fully participated in the review of our financial records, including the audit currently underway by the Office of the Superintendent of Insurance.”

Balderas wants the company to pay what he says are millions in unpaid taxes and punitive damages.

The AG alleges that Presbyterian falsified information on Medicaid deductions and credits. This would allow the company to avoid premium taxes and surcharges—Balderas said it resulted in millions of lost revenue for the state.

Mozes said Presbyterian is “committed to paying all taxes due to the state” and that Presbyterian Health Plan in 2016 “paid more than $52.6 million in premium taxes to the state and $20.1 million in assessments that help fund state-sponsored insurance programs.”

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These, Balderas says, violated the state Fraud Against Taxpayers Act, the state Insurance Code and constituted unjust enrichment, fraud and negligent misrepresentation.

The complaint alleges Presbyterian Health Plan illegally cut its tax liability in a number of ways related to Medicaid reimbursements on tax filings.

The complaint also outlines a proposed written settlement drafted by Presbyterian in which the AG says Presbyterian “sought to immunize itself against any liability” from amended returns filed between 2003 and 2011. The draft settlement was signed by an attorney with the Public Regulations Commission but did not go into effect because it lacked the signature of the Superintendent of Insurance, John Franchini.

The draft settlement came just three days before the Office of the Superintendent of Insurance, or OSI, became its own independent agency. Before that, OSI was part of the PRC.

There could be more coming as well. The Attorney General’s office said a review of civil and criminal allegations related to underpayment from healthcare companies, including Presbyterian, continues.

“We are confirming that our office is conducting an ongoing audit of premium tax collection that covers many issues with major New Mexico health insurance providers over multiple years,” State Auditor Tim Keller said in a statement Tuesday afternoon. “Our work is independent of the Attorney General’s lawsuit and the findings will be made public when it is complete.”

An audit found the state failed to collect more than $193 million in taxes from health insurance companies between April 2010 and April 2015. That number, the State Auditor said at the time, could turn out to be significantly higher.

Last year, a plan by the OSI to collect the back taxes had significant pushback from three separate agencies.

AG complaint Presbyterian by New Mexico Political Report on Scribd

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