The state of New Mexico and Presbyterian Healthcare Services agreed on a settlement to recoup millions in previously-unpaid Medicaid premium taxes. Attorney General Hector Balderas announced Monday his office came to the agreement with the healthcare company to repay $18.5 million to the state. “I appreciate Presbyterian’s willingness to do the right thing and pay what they owe through this speedy resolution,” Balderas said. “Given the corporation’s ambitious future plans, I am optimistic Presbyterian won’t repeat its past missteps. However, I will continue to monitor Presbyterian’s compliance with the findings contained in the Examination Resources audit.”
His office said the $18.5 million settlement came as part of an agreement to pay back the $14.6 million in unpaid premium taxes.
Insurance companies owe the state nearly $65 million in taxes. That’s according to an audit of premium taxes paid by insurance companies to New Mexico over more than a decade. The audit looked at 30 health, life and property insurers’ tax payments from from 2003 to 2016. Of those, 17 companies underpaid the taxes, with one insurer underpaying by nearly $30 million. Most of the underpaid money came because companies misapplied or claimed tax credits for which they did not actually qualify.
New Mexico’s Attorney General says one of the state’s largest healthcare providers committed fraud by deliberately underpaying taxes for over a decade by falsifying Medicaid deductions and credits. Attorney General Hector Balderas filed the claim in state court in Santa Fe Tuesday, alleging that Presbyterian Health Plan, Inc. and Presbyterian Healthcare Services filed claims for tax deductions and credits related to Medicaid for above what the company qualified for between 2001 and 2015.[perfectpullquote align=”right” cite=”” link=”” color=”” class=”” size=””]The state’s best political coverage. [/perfectpullquote]The suit refers to Presbyterian’s actions as “systemic and deliberate.”
“When insurance providers break the rules, they must face consequences,” Balderas said in a statement released by his office. “My office is working with the State Auditor to make sure that Presbyterian—and any other companies that engaged in similar fraudulent conduct—are held responsible for the serious injuries imposed on New Mexican taxpayers.”
Meanwhile, a separate audit of premium tax collections continues, State Auditor Tim Keller said in a statement. In a statement to NM Political Report, a spokeswoman said Presbyterian is “confident that we have acted in good faith and with the intent to comply with our legal obligations and responsibilities” and said the company “vehemently reject[s] the allegations made today and we look forward to a positive resolution to this matter.”
“We are genuinely alarmed and surprised by the timing and nature of these allegations,” the emailed statement from Communications Manager Melanie Mozes said.
Three state agencies expressed a lack of confidence Thursday in the Office of the Superintendent of Insurance’s (OSI) ability to collect millions of dollars back taxes owed to the state from health insurance companies. State Auditor Tim Keller, Department of Finance and Administration State Budget Division Director A.J. Forte and Legislative Finance Committee Deputy Director Charles Sallee all expressed doubts in OSI’s plans to collect an estimated $193 million that it failed to collect from premium health insurance taxes from 2010 through 2015. The comments came at an interim Legislative Finance Committee hearing. “I think it’s very notable there are three oversight agencies looking at this,” Forte told state lawmakers. “There are too many inconsistencies for me to feel comfortable in this process.”
The controversy began when Keller’s office revealed the uncollected revenue in a special audit earlier this year.
The state failed to collect nearly $200 million in taxes from health insurance companies during a recent five-year period, according to a report released Tuesday by State Auditor Tim Keller. The state Office of the Superintendent of Insurance (OSI) should have collected more than $193 million between April 2010 and April 2015, according to the report. OSI’s purpose is to collect premium taxes from insurers who do business in New Mexico. In the report, Keller noted that the $193 million total is based on a sample representing 26 percent of all premium taxes collected during the time period. In other words, OSI may have failed to collect more than that estimate.