June 24, 2015

Three more behavioral health providers sue state

Three more nonprofits that had Medicaid funding cut off by the Human Services Department in 2013 have filed suit against the state.

Health MoneyThe Albuquerque Journal reported on the new lawsuits. The three new nonprofits suing the state bring the total to ten. The Journal reports that it is likely the three suits will be consolidated in federal court with the other seven.

More from the paper:

The lawsuits contend the nonprofits – which provided services to the mentally ill and addicted – were denied basic due process when the department cut off their funding, determined there were “credible allegations of fraud” against them and referred them to the attorney general to be investigated.

The department said an audit of 15 providers it commissioned from Boston-based Public Consulting Group identified more than $36 million in overbilling from 2009 to 2012, widespread mismanagement and possible fraud.

The three new nonprofits that have filed suit are The Counseling Center, Easter Seals El Mirador, and Border Area Mental Health Services.

In 2013, HSD cut off the funding for over a dozen nonprofits that provided behavioral health services in New Mexico. This came after a controversial and secretive audit that HSD said showed “credible allegations of fraud” among the providers.

Federal law gives the HSD secretary the authority to cut off federal Medicaid funding for credible allegations of fraud. The law also allows some discretion in cutting off funding.

After losing Medicaid funding, several providers ceased operations. Arizona firms took over the operations but that appears temporary—some are leaving the state over the high costs of doing business.

Since then, the office of the Attorney General has cleared three providers of fraud, though it did find overbilling.

The Attorney General filed fraud charges against a now-defunct Carlsbad clinic earlier this month. One therapist in a Raton-based provider was charged with fraud, though the fraud was not systemic in the non-profit.

Easters Seals El Mirador, of Santa Fe, and The Counseling Center, of Alamogordo, were two of the nonprofits that were cleared by the Attorney General earlier this year. Service Organization for Youth, the Raton-based non-profit, was the third provider to be cleared by Balderas’ office, just two weeks ago.

Balderas’ office recently put out requests for proposals for forensic audit firms to look into more behavioral health providers. Balderas has said that the speedy conclusion of the investigation into behavioral health audits is a priority.


  • Matthew Reichbach

    Matthew Reichbach is the editor of the NM Political Report. The founder and editor of the NM Telegram, Matthew also a co-founded New Mexico FBIHOP with his brother and one of the original hires at the groundbreaking website the New Mexico Independent. Matthew has covered events such as the Democratic National Convention and Netroots Nation and formerly published, “The Morning Word,” a daily political news summary for NM Telegram and the Santa Fe Reporter.