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. That’s because the $250,000 that HSD provided last year—one quarter of Sangre de Christo House’s budget—may be on the chopping block, putting the program’s future into question.

Trimmed budget slashed some behavioral health funding

The fiscal year 2017 budget approved by the state Legislature currently sitting on Gov. Susana Martinez’ cuts this type of non-Medicaid behavioral health funding by $3.7 million. These cuts equal to roughly 10 percent of last year’s $50 million non-Medicaid behavioral health spending from the state.

Though the cuts are causing concern for behavioral health advocates, they could have been more drastic.

An early form of the budget included $8 million in behavioral health cuts. Advocates protested these initial proposed cuts earlier this month in front of the state capitol toward the end of the legislative session. Roberta Rael, executive director of Generation Justice, an Albuquerque-based nonprofit that warns New Mexico is in a behavioral health crisis, called the lessening of cuts “relative.”

“There are still aren’t going to be enough services,” Rael said.

HSD originally identified $5.7 million in cost savings from its non-Medicaid behavioral health spending that could instead be shifted toward its Medicaid budget, which itself faced a shortfall because of the state budget problems this year. The savings, according to the department, came because of expanded behavioral health services offered through Medicaid, the federal program that offers health care to the poor, in the wake of the state’s Medicaid expansion under the federal Affordable Care Act.

Shifting non-Medicaid behavioral health spending to Medicaid, HSD’s reasoning goes, will make up for the cuts in this year’s non-Medicaid behavioral health spending.

Some don’t buy the argument. State Sen. Jerry Ortiz y Pino, D-Albuquerque, chairs the interim Legislative Health and Human Services Committee and called HSD’s argument “the usual attempt to put the best appearance on a bad situation.”

“Losing what amounts to probably a 10 percent cut of the non-Medicaid behavioral health budget means a significant number of people who won’t be able to get help,” Ortiz y Pino said.

Among health services he says are now at risk are case management including patient outreach, drug detoxing services and supportive services as getting patients to and from doctor’s appointments.

An HSD spokesman and a department attorney did not return phone calls for this story, though NM Political Report learned of their thoughts through others involved in the discussions on behavioral health funding.

Medina, for his part, is worried about potential cuts to the transitional behavioral his organization provides, which he says Medicaid won’t pay for. Cuts to transitional behavioral health were included among the steeper cuts from the original proposed budget. Medina said he’s currently waiting to see how his organization fares in the budget eventually approved by the Legislature.

Currently, his organization is housing 15 women, two of whom have young children staying with them.

“When it comes to non-Medicaid funds, they are crucial,” Medina said.

‘Paranoia’ since shakeup

Behavioral health services have frequented local news headlines ever since Gov. Susana Martinez’s administration shut off Medicaid funding to 15 behavioral health providers amid what HSD called “credible allegations” of Medicaid fraud in the summer of 2013. HSD replaced services from the 15 health providers, which made up more than 80 percent of behavioral health treatment in the state, with five Arizona-based companies.

Most of the 15 New Mexico behavioral health providers went out of business. The New Mexico Attorney General’s Office has since exonerated 13 of those providers, though HSD has said the audit found money was still misspent and the department would seek to recoup that money.

Two of the Arizona companies, meanwhile, have since left the state.

Both New Mexico’s U.S. Senators and two of its three members of the House—all Democrats—recently called for a federal investigation of the 2013 behavioral health shakeup amid Attorney General Hector Balderas’ findings. An HSD spokesman soon called the attempt a “partisan stunt” in a prepared statement provided to media outlets.

Medina, who himself has been in recovery for 24 years, worked for a smaller provider that wasn’t directly affected during the shakeup. But he said the accusations of fraud among the 15 providers causes “a lot of paranoia” among smaller providers.

“The bottom line is the integrity of this system has been compromised,” Medina said.

Advocates like Rael welcome an investigation into the shakeup. But she also warns policymakers to keep their eye on what really matters.

“We can’t wait unit the investigation is complete before we try to get hundreds of people the care they deserve,” she said.

Questions of priorities

Behavioral health cuts in the current budget reflect the reality of New Mexico’s troubled revenue streams—a significant chunk of which relies on falling oil and gas prices. But they also reflect local lawmakers’ policy priorities. This year’s legislative session revolved largely on tough-on-crime legislation, which led to more money for jails and prisons and cuts for nearly everything else.

“In the final stack of cards, corrections gets a budget increase,” Fred Sandoval, operations manager for the National Latino Behavioral Health Association, said in an interview. “If that means your priority is to incarcerate, that in itself says the political priority is really leaning toward institutionalization rather than community-based services.”

Another topic remained largely absent from the discussion during the session—finding new and alternative ways to pay for this type of care.