State settles for $484 after $2.8M demand

Overbilling claim was part of shutdown of 15 behavioral health firms

SANTA FE — Attorney Bryan Davis says he thought it was a typo.

The state Human Services Department had once accused his client of overbilling Medicaid and demanded $2.8 million back.

And then the state lowered its demand — to just $484.71.

The dramatic turnaround is the latest chapter in a fouryear dispute that shook up New Mexico’s behavioral health network. It began in 2013 when the state Human Services Department cut off Medicaid and other funding to 15 providers, citing allegations of overbilling, mismanagement and possible fraud, as outlined in an audit.

One of the agencies accused was the Southwest Counseling Center in Las Cruces, a client of Davis, the attorney. The center served people struggling with drug addiction or other behav-

ioral health problems.

In an interview Friday, Roque Garcia, who worked as CEO of the group, said the $484.71 demand — made in May this year — shows how inaccurate the state’s allegations were all along.

“Four years ago, they closed us down,” Garcia said. “… They called me all sorts of things, but it was all false.”

Gov. Susana Martinez’s administration says the scrutiny on payments to behavioral health providers has shown results. About $4.4 million has been returned to the state altogether, said Joseph Cueto, a spokesman for the governor.

As for the Southwest Counseling Center, the state says it demanded the $2.8 million only after the group had failed to provide the proper documentation for its billing.

Once the paperwork came through, the state lowered its demand accordingly, Human Services Department officials said.

“Four years after the audit began and eight months after HSD made a determination of failed claims and presented it to SWCC,” Cueto said, “SWCC finally provided the paperwork that they are required by law and contract to maintain in order to support their billing.”

The Southwest Counseling Center, Davis said, disputes even the smaller amount but agreed to pay it this year as part of a deal to receive $750,000 in payments that had been suspended in 2013.

He said he was surprised that the state had reversed course so substantially. The $2.8 million demand came in January, and the $485 demand came in May.

“I actually called them and said, ‘Is this a typo?’” Davis told the Journal.

New Mexico In Depth, a nonprofit news organization, first reported on the reduced demand this week.

In halting Medicaid and other funding in 2013, the state Human Services Department cited an audit that it said showed widespread mismanagement and possible fraud. It referred the allegations to the attorney general.

The Office of the Attorney General later cleared all 15 groups of fraud and said it identified $1.16 million in overbilling, rather than the $36 million the administration had alleged.

The disruption, nevertheless, drove many of the New Mexico companies out of the behavioral health business. Legislators and others complained about the ensuing disruption in services to the vulnerable mentally ill and addicted.

“They interrupted people’s lives tremendously,” Garcia said.

The Martinez administration, in turn, says New Mexico has expanded access to behavioral health services in recent year, though some legislators dispute that.

“More New Mexicans are receiving behavioral health services than ever before,” Cueto said.

Four of the five Arizona behavioral health companies brought in after the local providers were ousted have since left the state or announced plans to.