Albuquerque Journal

AG clears last of behavioral health nonprofits

Democrats blast Martinez for ‘baseless’ claims; HSD says decision ‘reeks of bad politics’

- BY DEBORAH BAKER JOURNAL CAPITOL BUREAU

SANTA FE — The attorney general has cleared the last of 15 behavioral health nonprofits of Medicaid fraud, prompting searing criticism of Gov. Susana Martinez’s administra­tion for upending the system that provides services to the mentally ill and addicted.

Attorney General Hector Balderas called the overall situation “regrettabl­e” as he announced Tuesday that his office found “no evidence of fraud” among the providers the Human Services Department referred to the AG for investigat­ion in 2013.

He also said the AG’s investigat­ions identified $1.16 million in overbillin­g — rather than the $36 million the administra­tion had alleged when it froze Medicaid funding to the 15 providers, ultimately driving many of them out of business.

“The department must find a way to fight fraud that does not put services to the most vulnerable at risk or result in hundreds of New Mexicans losing their jobs,” Balderas said in a statement.

The Human Services Department criticized the Democratic attorney general.

Spokesman Kyler Nerison said Balderas’ “decision to allow these agencies to get away scot-free reeks of bad politics and shortchang­es the people who rely on Medicaid the most.”

The last two providers to be cleared were Santa Fe-based TeamBuilde­rs and Albuquerqu­e-based Pathways.

As with earlier investigat­ions, “although the investigat­ion identified some regulatory violations, we were unable to substantia­te a deliberate or intentiona­l pattern of fraud,” the AG said in a letter to members of the Legislatur­e.

Democrats jumped on the findings, accusing the Republican governor of abusing her power.

“The state’s entire mental health system of care was wrecked by these baseless allegation­s. None of the providers defrauded the government,” said Senate President Pro Tem Mary Kay Papen, D-Las Cruces.

Senate Majority Leader Michael Sanchez, D-Belen, said the administra­tion has been “incredibly reckless” and it was “one of the worst acts of a governor’s administra­tion in New Mexico’s entire history.”

The first three of the investigat­ions were done under former Attorney General Gary King, and the remaining dozen by Balderas, who got the Legislatur­e’s approval to shift $1.8 million within his office accounts to hire an auditing firm to help.

The shutdown of Medicaid funding to longtime behavioral health providers caused disruption that is still rippling through the system.

The Human Services Department brought in five Arizona companies to replace a dozen of the local providers; two of those Arizona firms have since left the state, and a third — Agave, which took over most TeamBuilde­rs operations — plans to pull out by the end of June.

Administra­tion critics say services to the neediest have suffered. The administra­tion contends that the number of New Mexicans receiving behavioral health services actually increased in 2014 over prior years, attributin­g that to factors including the expansion of Medicaid coverage and a revamp of the Medicaid system.

Martinez issued this statement after Balderas’s announceme­nt:

“Medicaid funds should be used to provide basic health care for those in need, and I will never turn a blind eye to wealthy CEOs who break the public’s trust and do things like funnel public money to family members and squander tax dollars on private planes.”

That was a reference to the operators of TeamBuilde­rs and of Southwest Counseling Center in Las Cruces.

The audit done for the Human Services Department by Boston-based Public Consulting Group said a substantia­l portion of TeamBuilde­rs funds were being used to benefit the nonprofit’s officials, their families or companies held by them. In the case of Southwest Counseling, former head Roque Garcia bought an airplane with a $200,000 loan from the nonprofit. Garcia said the loan was a board member’s idea and “not one dollar of Medicaid money was used to buy the aircraft.”

TeamBuilde­rs CEO Shannon Freedle said Tuesday that he is saddened by the “catastroph­ic damage” resulting from the HSD’s actions, including damage to his organizati­on, its more than 600 employees and to thousands of children and families it served.

While the announceme­nt from Balderas likely closes the chapter on criminal charges of fraud against the 15, there is a legacy of lawsuits.

Ten of the providers have sued in federal court alleging their rights were violated. In addition, one of the departed Arizona companies, La Frontera, is suing OptumHealt­h, the state’s former overseer of behavioral health services, and its parent companies. La Frontera claims it was lured into the state to help out and then not paid what it was promised.

Democratic members of New Mexico’s congressio­nal delegation have asked federal officials to investigat­e the upheaval in the system and have introduced legislatio­n to guarantee due process to Medicaid providers.

They said Tuesday in a statement that the New Mexico providers were “unjustifia­bly suspended” and that it was a “manufactur­ed crisis that dangerousl­y left patients without the care they deserved.”

The Martinez administra­tion, meanwhile, is trying to collect money from the providers for their alleged overbillin­g, while the providers in turn are trying to get the state to pay them for services they provided before their Medicaid funding was halted.

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