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.
—HSD Secretary talks behavioral health shakeup. Here at NM Political Report, we’ve been following the behavioral health shakeup that came after the state Human Services Department decided to cut off Medicaid funding for 15 providers, citing “credible allegations of fraud.”
Since then, several went out of business and the Attorney General exonerated 13 of the groups. While he wasn’t at the helm at the time, legislators on the Legislative Finance Committee still wanted an update on the process from the department’s secretary. HSD Secretary Brent Earnest explained that there was “still some overbilling” with those providers who were cleared and there was an ongoing administrative process to deal with the overbilling. He was less willing to say what that process was, beyond saying it would be “months more than years” before the situations were resolved and that currently OptumHealth is holding the funds.
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.
Democratic members of New Mexico congressional delegation announced they are calling on the federal government to investigate the behavioral health shakeup from two years ago. The call came in the form of a letter from two U.S. Senators and two of the three members of Congress. All four are Democrats. The letter to U.S. Department of Health and Human Services Secretary Sylvia Burwell cites Attorney General Hector Balderas’ investigation that cleared 13 of 15 providers; the investigation into the final two providers is still ongoing. Last week, Balderas announced ten more providers were cleared, in addition to the three who had been cleared the year before.
U.S. Rep. Michelle Lujan Grisham said she is “angry” over the behavioral health crisis, a day after the Attorney General released a report clearing ten more providers. Lujan Grisham had previously said in statements to other outlets that she supported an investigation into what went wrong, but spoke to NM Political Report on Tuesday while in a car in Washington D.C. on her way to a vote. “The state needs to investigate exactly how we got here,” she said. State Sen. Howie Morales, D-Silver City, also called for an investigation into the situation. The Democrat from Albuquerque added “someone needs to be held accountable” for the shakeup that put many providers out of business.
Former behavioral health providers and lawmakers spoke out against Gov. Susana Martinez and her administration Monday afternoon over a shutdown of behavioral health providers in 2013. They spoke after a letter from the Attorney General’s office announced an investigation found no fraud from another ten behavioral health providers, bringing the total to 13. Sen. Jerry Ortiz y Pino, D-Albuquerque, a former social worker, said the results are relieving, but came too late. “The news that the Attorney General has exonerated ten more of the agencies accused of fraud two years ago was very welcome but unfortunately comes about two years late,” Ortiz y Pino said during a press conference. He praised the work from the AG’s office since Balderas took over, but also criticized former Attorney General Gary King for not taking swift enough action on the investigation.
The Attorney General’s office cleared ten more behavioral health providers of allegations of fraud years after a shakeup of the state behavioral health system based on “credible allegations of fraud.”
A letter from Attorney General Hector Balderas to legislators delivered Monday morning announced that his office’s investigation found no “pattern of fraud for any of the ten completed investigations.”
This brings the total amount of firms cleared to 13. Balderas’ letter said that his office did find “some regulatory violations” but nothing that rose to the level of what the Attorney General’s office could prove as fraud. “We came to different conclusions on many of the alleged violations cited in the [Public Consulting Group] report, and ultimately did not find that the violations that we were able to substantiate reflected a deliberate or intentional pattern of fraud,” the letter says. The letter goes on to say the results will be referred to the state Human Services Department for administrative action on that department’s behalf. A statement from the HSD public information officer vowed to continue to fight fraud.