Even in his final days of battling leukemia in early 2016, Jose Frietze was fighting for the youth services agency he founded in 1977. The state Human Services Department had accused the organization — Las Cruces-based Families and Youth Inc. — of potential Medicaid fraud and overbilling by $856,745 in 2013. A stop payment of $1.5 million in Medicaid funding for services already provided crimped FYI’s cash flow, leading to layoffs. And because of the accusations, FYI was forced to hand off part of its business to an Arizona company brought in by Gov. Susana Martinez’s administration. Frietze’s daughters Victoria and Marisa remember how tough the allegations were on Frietze and their family.
Years after the state cut off Medicaid funding to 15 behavioral health providers, citing “credible allegations of fraud,” the Attorney General cleared all providers of the alleged fraud. AG Hector Balderas made finishing the investigation into the providers a key goal when he entered office in 2015. Previously: Top ten stories of 2016: 10-6; #5: NM Dems buck national trend, retake House; #4: Demesia Padilla resigns
In April, Balderas announced the investigation was complete, with no evidence of fraud in the final two companies. Balderas previously cleared ten providers in February, and had already cleared two others in 2015. The allegations of fraud came from a 2013 audit for the state Human Services Department by Boston-based Public Consulting Group.
Another of the behavioral health providers brought in from Arizona to fill the gap made after the state Human Services Department cut off funding to 15 organizations is leaving the state. Valle del Sol is the fourth of five organizations from Arizona that were brought into the state in 2013 to take over behavioral health services to leave the state. The Santa Fe New Mexican reported that an executive with Valle del Sol said the company is working with HSD on the transition to aid patients. A spokesman for HSD said the same thing to the northern New Mexico paper. Valle del Sol had seven locations throughout the state.
After testimony from officials from three nonprofits that provided behavioral health services which were targeted with fraud allegations but later cleared by the Attorney General,a second New Mexico lawmaker called for state Human Services Department Secretary Brent Earnest to resign. “This is just morally repugnant behavior that this administration, this department, has done,” state Rep. Christine Trujillo, D-Albuquerque, said Wednesday at an interim Legislative Health and Human Services Committee meeting. “It’s criminal and obscene.”
Trujillo and eight other state lawmakers listened to the heads of three of the 15 behavioral health organizations that were infamously accused of “credible allegations of fraud” in 2013 by HSD’s then-Secretary Sidonie Squier. The department cited an audit from Boston-based Public Consulting Group that found $34 million in Medicaid fraud between the 15 providers. Squier cut off Medicaid funding from the providers, but the Attorney General’s Office has since cleared all from any wrongdoing.
New Mexico legislators want the Department of Justice to look into the behavioral health shakeup from 2013 after the state Attorney General found no fraud. Senate President Pro Tem Mary Kay Papen of Las Cruces, Senate Majority Leader Michael Sanchez of Belen, House Minority Leader Brian Egolf of Albuquerque, all Democrats, sent the letter. The three received letters from providers who had Medicaid funding cut by the state, and forwarded these letters to the three members of the U.S. House and two members of the U.S. Senate from New Mexico. “The contents of these letters greatly concern us,” the three legislative leaders wrote. “We have also been contacted by constituents, requesting our assistance with accessing behavioral health services over the past two years.”
All 15 of the behavioral health providers that the state Human Services Department cut Medicaid funding from in a controversial action three years ago have now been cleared of allegations of fraud. Attorney General Hector Balderas told legislators Tuesday his investigation into the final two providers found no allegations of fraud. These final two providers are Pathways and TeamBuilders. HSD cut off Medicaid funding to the state’s 15 behavioral providers in 2013, citing “credible allegations of fraud” after the state department contracted an audit with Boston-based Public Consulting Group. Some of the providers shut their doors after the state halted their federal Medicaid funding, causing a shakeup in the behavioral health system around New Mexico.
Another Arizona-based behavioral health provider is leaving New Mexico, officials announced Friday. In the latest departure, 3,000 patients currently in substance abuse, mental health and other behavioral health programs—mostly in Northern New Mexico—will have to find a new provider in 90 days, according to a report in today’s Santa Fe New Mexican. The newspaper reported that Agave Health, Inc. is leaving the state, the third of five behavioral health providers from Arizona to leave the state since the shakeup in 2013. “Today, Agave is faced with an insurmountable obstacle, and after many months of undue financial hardship and the foreseen rate reductions in Medicaid rates, the board of directors has regretfully decided to close Agave Health,” Dr. Heath Kilgore, chief executive officer of Agave, and Jeff Jorde, president of the firm, said in a statement. Agave Health is the third of the five Arizona firms to leave New Mexico since the state signed contracts with them for more than $17 million.
The company responsible for oversight of the 15 behavioral health providers that lost funding for alleged Medicaid fraud is now itself facing lawsuits over alleged fraud. OptumHealth faces three lawsuits over alleged malfeasance in its contract with the state to oversee the state’s Medicaid program. Of the 15 companies that the state Human Services Department, citing an audit by Public Consulting Group, said had “credible allegations of fraud” already 13 have been exonerated by the state Attorney General after investigations. It was Optum’s efforts to root out alleged fraud and waste that led to the shakeup. The shakeup included the state bringing in Arizona companies to take over for the New Mexico providers that no longer had funding to continue, some of which have went out of business.
The Democratic members of the Congressional delegation want to make sure a repeat of the 2013 behavioral health shakeup can’t happen again in New Mexico or anywhere else. The members introduced legislation that would clarify rules on when Medicaid funding can be taken away from providers by the state. The legislation is called the “Medicaid Program Integrity Enhancement Act of 2016.”
Currently, federal law allows states to remove Medicaid funding for “credible allegations of fraud.” It also allows for discretion from the state in cutting off funding. The new legislation would require Medicaid agencies in the state to consult with the state attorney general before payments are cut off, as well as requiring states to look at the impact on beneficiaries before payments are suspended. The legislation would also require states to stop the payment suspensions after the end of an investigation and provide for an appeal process.
Last year, Lawrence Medina helped start a transitional living program to provide services for women fresh out of jail and prison and in need of help. Funding for Sangre de Christo House, a 20-bed facility located just south of Cochiti Pueblo in Peña Blanca, comes from Medicaid, the state Corrections Department and the state Human Services Department. Medina praises the state Human Services Department, which gave his provider Sangre de Christo House key startup money, to “fill a big gap” in services for behavioral health, which treats a vulnerable sector of the population struggling with drug addictions and mental illness. “I have to give HSD all the credit because they’ve been 100 percent behind us,” Medina told NM Political Report in an interview. This year, he might not be so lucky.