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.
There’s no getting around it. Four years after Gov. Susana Martinez’s administration charged 15 behavioral health organizations with potentially defrauding the state’s Medicaid program, its case has experienced a slow-motion unraveling. No Medicaid fraud was ever found. And those eye-popping estimates that added up to $36 million the organizations had overbilled Medicaid? In the summer of 2017, the Human Services Department (HSD) is seeking drastically lower reimbursements for overbilling the public health insurance program for low-income residents, a review of public records and state court documents has found.
LAS CRUCES—A year-old scandal involving alleged systemic fraud with the state’s management of federal food aid benefits was the elephant in the federal courtroom Thursday. Both Kenneth Gonzales, a federal district judge, and Lawrence Parker, a court-appointed “special master” who is tasked with guiding the New Mexico Human Service Department (HSD) in its federal compliance with Medicaid and Supplemental Nutrition Assistance Program benefits, alluded to the scandal at the hearing. “What nobody wants to see, and you especially, is a culture that allows this to happen,” Gonzales told HSD Secretary Brent Earnest. Parker emphasized that “many of those same people” who were alleged in 2016 to have instructed HSD employees to falsify SNAP applications to meet federal quotas “are still in place” at the department.Parker raised the question of why the department’s management has largely remained the same since the shocking allegations of fraud came to light last year. More than once, Parker recommended a staff shakeup.
As Gilda Radner’s Emily Litella might have said, “Nevermind!”
More than four years after accusing Southwest Counseling Center of overbilling the state by $2.8 million in Medicaid reimbursements, the Human Services Department has settled with the former Las Cruces behavioral health provider for $484.87. SWCC was one of 15 health organizations accused of overbilling and potential fraud by Gov. Susana Martinez’s administration in 2013. The state suspended Medicaid payments to the organizations pending an investigation, and outsourced behavioral health contracts to five Arizona companies, which effectively crippled the network of New Mexico behavioral health providers. All the while, the state kept an audit they used to justify the move secret, making it impossible for each organization to know what they were being accused of specifically. See a timeline and read of coverage of the Medicaid freeze here.
Tens of thousands of Medicaid recipients in New Mexico are not receiving their health benefits on time, according to numbers from state government. As of February of this year, more than 48,000 Medicaid cases up for renewal are not being processed by the state Human Services Department (HSD) on time, according to a federal court filing in April citing HSD’s own numbers. And that number of Medicaid renewal delays has only grown to more than 59,000 as of May 10, according to Maria Griego, a staff attorney with the New Mexico Center on Law and Poverty. “They’re pretty bad,” Griego said of the delays. While the number of New Mexicans who haven’t received their Medicaid benefits on time has been expanding, HSD erased a large part of the backlog of renewal applications for the federal Supplemental Assistance Nutrition Program (SNAP), formerly known as food stamps.
Last month, 82-year-old Viola Weir received a letter from the state that rejected her request for Medicaid benefits to pay for nursing home care. The letter from the New Mexico Human Services Department (HSD) said she had not provided the state agency with “the mandatory documents we need to decide if you can get benefits.” As a result, the department denied Viola Weir her Medicaid benefits. The very same letter also said her income levels and assets met the qualifications to receive such care. That’s according to documentation that Tom Kovach, Weir’s son-in-law, sent to NM Political Report from HSD, the state department which processes federal benefits. To Kovach, the letter didn’t make sense.
Lawrence Martinez says driving triggers him back to the dark days of dependency. “Monday was my first day driving the car,” the Albuquerque father of four said last week, talking about the car he and his wife recently bought, as he sat in a conference room at Albuquerque’s Turning Point Recovery Center. “That was an issue on its own, but it’s working out now. Leaving the house, I get anxiety. Once I get on the road, it’s perfect.”
Martinez has been recovering from a methamphetamine addiction since last July.
When state Human Services Secretary Brent Earnest goes before lawmakers to speak about his budget for the Medicaid insurance program, many want to run for cover. One year, he needed as much as $100 million from the general fund to fully pay for all the new enrollees under the federal Affordable Care Act and provide the same level of service. Last fall, he said he needed another $80 million for the fiscal year that begins July 1. On Thursday, he told the House Appropriations and Finance Committee that request had dropped to $42 million. “This is a significantly better picture than you saw in the fall,” Earnest said.
The state wants to extend a waiver that allows the state to waive work requirements for federal food benefits. The Santa Fe New Mexican reported the news of the proposed waiver coming from the embattled state Human Services Department. The department previously sought to reimplement the work rules for the Supplemental Nutrition Assistance Program, or SNAP, but a federal judge blocked the request. Earlier this year, a federal judge slammed HSD for doing the work of creating new rules and procedures for the work requirements while not working toward compliance with a decades-old consent order. Last week, a federal judge named a Texas administrator as a “special master” to oversee the department’s food benefits functions.
NM Political Report senior reporter Joey Peters and reporter Andy Lyman sat down to talk about what we covered this week and what to expect next week. The two reporters talked a little about what a Trump presidency might mean for New Mexico, especially in terms of a new BLM rule and marijuana. They also recapped Peters’ coverage of the state’s Human Services Department leading up to the new special master announced Thursday and the fact that Gov. Susana Martinez is no longer chair of the Republican Governors Association.