April 13, 2016

HSC takeover a déjà vu to behavioral health fiasco

Mary Kay Papen is the President Pro Tem of the New Mexico State Senate and a Democrat who represents District 38.

The public should continue questioning the timing of a vote by University of New Mexico regents to change the governing structure of UNM’s Health Sciences Center.

Senate President Pro Tem Mary Kay Papen

Senate President Pro Tem Mary Kay Papen

These regents, appointed by Gov. Susana Martinez, claim quick action was needed to streamline university operations and create efficiency. To the best of my knowledge, no thoughtful deliberative process involving input from stakeholders and consensus building took place before this major change. I am worried that this is yet another ill-conceived move by public officials that could end up jeopardizing the HSC, a key player in a core segment of the state’s health care infrastructure.

Sadly, this reminds me of the Human Services Department’s announcement nearly three years ago that it would replace 15 behavioral health provider organizations with five Arizona behavioral health agencies.

In mid-2013, the HSD claimed that high rates of suicide and substance abuse deaths, as well as protection of taxpayer funds, warranted immediate systemic change. Also at that time, OptumHealth—an affiliate of United Healthcare—was being paid millions of dollars annually by the state’s Medicaid program to oversee and administer funds spent on behavioral health. Identifying potential fraudulent billing by behavioral health providers was a key requirement of Optum under its contract.

According to lawsuits filed by Optum insiders in 2012 and early 2013 that have only recently been made public, there were serious problems with Optum’s information technology (IT) system that it hid from the state or ignored while it continued to bill Medicaid for work its system could not do.

In early 2013, after the Arizona replacements had already been interviewed and selected, Public Consulting Group (PCG) was hired to audit the New Mexico agencies to be replaced.  PCG’s audit found some overpayments, but no credible allegations of fraud. Regardless, the HSD stopped payments to the audited agencies and referred them to the attorney general to investigate for fraud.

This reorganization affected behavioral health services for 88,000 patients. According to the HSD’s plan, the Arizona agencies would take over the operations of the suspended New Mexico agencies in a period of weeks.

Optum’s contract with the state was supposed to expire in June 2013. As a result of the shake-up, Optum’s contract was extended to assist with the transition of patients to the Arizona providers. As of last week, all 15 accused New Mexico agencies have been cleared of fraud by the attorney general. Four of the five Arizona replacement agencies have pulled out.

One Arizona agency has filed suit against United and Optum, alleging that the behavioral health crisis was manufactured to cover up Optum’s mismanagement of Medicaid funds and defective claims management system. The suit alleges that United falsely and fraudulently represented that Optum’s IT system was fully functional and capable of ensuring a seamless transition.

As we know, the transition was anything but seamless.

Incidentally, drug overdose deaths, opioid overdose-related emergency room visits and suicides increased from 2013 to 2014, according to the latest data from New Mexico’s Department of Health. Online searches indicate that the HSD’s former Medicaid director and its former general counsel, both of whom were involved in the behavioral health reorganization, now work for United affiliates. Through an affiliate, United still makes millions overseeing the state’s non-Medicaid behavioral health program. United’s health insurance affiliate, one of the state’s Medicaid managed care organizations, just announced that it is dropping HSC clinical services from its Medicaid provider network.

The university’s HSC has reserves of $200 million. In February, the HSC denied a request from the Martinez Administration to donate $50 million from its reserves to help the state cover its Medicaid shortfall. If there is a lesson to be learned from the behavioral health reorganization, it is to look behind hastily implemented changes that could affect broader access to health care.