N.M. settles with 3 health providers

Former Gov. Martinez suspended payments to 15 behavioral health groups in 2013 over allegations of fraud

In a reversal of former Gov. Susana Martinez’s administration, which aggressively pursued fraud allegations against behavioral health providers, the state agreed Tuesday to settle with three behavioral health organizations over disputed payments that were frozen in 2013.

Martinez suspended payments to 15 behavioral health providers in 2013, including Hogares Inc., an Albuquerque-based mental health care provider for young adults and their families; Valencia Counseling Services Inc., which addresses behavioral health and addiction issues in Los Lunas; and The Counseling Center Inc., which offers outpatient addiction services in Santa Fe.

At the time, the state said there had been “credible allegations of fraud,” including improper billing and record-keeping in more than a dozen companies. But the companies argued in a lawsuit that the Human Services Department failed to provide documents to back up those claims and was wrong to withhold payments.

The halt in Medicaid payments caused most of the companies to leave the state and led to a loss of services for thousands of New Mexicans.

In 2016, Attorney General Hector Balderas cleared the companies of all charges, but the Martinez administration continued to pursue claims against them.

Gov. Michelle Lujan Grisham’s administration, which has at times been sympathetic to providers, is now changing state government’s course.

Human Services Secretary David Scrase said in a statement the settlements are in the best interest of New Mexico.

“We’ll continue to work with other behavioral health providers affected by the 2013 New Mexico Medicaid payment freeze and to rebuild this essential network of services that so many vulnerable New Mexicans need and rely on,” he said.

Last month, Scrase encouraged New Mexicans to watch a documentary film called The Shake-Up about the 2013 payment freeze and the people who lost services as a result.

“I think people need to see and talk about this film to ensure that something like this never happens again,” he said.

Under Martinez, the state alleged Medicaid

overpaid the companies, collectively, roughly $5.89 million — money the Human Services Department said it was entitled to recoup.

But Valencia, Hogares and The Counseling Center disputed the allegations, according to settlement documents.

In individual settlements, the companies said they did not agree with the methodologies used by the Human Services Department to calculate overpayments.

Not only did overpayments not occur, the companies say in the settlements, but the decisions reached concerning alleged overpayments were unfair and inaccurate.

As part of the settlement agreements reached Tuesday, the parties agreed each company would be paid managed care funds.

In the Hogares case, the company will be paid $1.81 million, equal to roughly half of the alleged overpayments. Originally, the company was said to owe the Human Services Department $3.1 million.

The Counseling Center will be paid more than $301,500. A hearing officer had originally found more than $379,000 was due to the state.

Valencia, which was originally thought to owe $2.4 million, will be paid $579,500.