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New Mexico fraud probe is one for the books

October 22, 2013
by Dennis Grantham, Editor-in-Chief
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Investigation certain to be cited as a textbook case, though its lessons remain unknown

Last Friday’s release of the $3 million New Mexico behavioral health provider audit was intended to comply with state sunshine laws – and a court order resulting from a lawsuit by news organizations and good-government advocates to let the public see just what led to what New Mexicans call “the Medicaid Freeze.” This freeze, of course, cut off Medicaid payments to 15 of the state’s major behavioral health providers in June and has since become the biggest story of the year in New Mexico.

But the 58-page summary of findings released by the office of Attorney General Gary King, which has been handling the investigation at the behest of HSD, was so heavily redacted as to offer almost no new information, prompting numerous complaints that the state’s big freeze has generated an awful lot of heat but very, very little additional light.

The heat has been particularly strong on two groups: mental health consumers and their families, who have faced sometimes significant service disruptions, and on the 15 providers who have yet to face any charges but subsequently were financially forced to close, then essentially surrender their organizations and personnel to new management teams, transplanted from Arizona and funded with millions of state “transition” dollars.

Though the AG’s blacked out report contained very little new information, it did contain several very interesting details that virtually every news organization noted in its reporting. For example, there was this “startling” quote from the audit summary, contained in a strongly worded editorial in the Santa Fe New Mexican on Sunday, October 20:

“PCG’s Case File Audit did not uncover what it would consider to be credible allegations of fraud, nor any significant concerns related to consumer safety,” says the editorial. Yet, it continues, ‘The “credible allegations of fraud” threshold is the state’s justification for suspending all companies at once.’ An Associated Press story, run in the Sacramento Bee, agrees.

The editorial also raises the uncomfortable question of “why Human Services Department officials were looking into Arizona providers even before the audit took place.” This bit of information, acknowledged by the man who later led PCG’s controversial audit effort – and who went along on at least one of the visits, led even the reserved New Mexican to wonder whether “the audit looks like an excuse to transfer management.” The notion that HSD officials might have had something beyond a fiduciary motive to audit and close the providers was something I first reported in a July Behavioral Healthcare story. Though the thought is distasteful, its persistence is only fueled by the controversy surrounding the audit, the paper trail of HSD personnel prior to the audit who envisioned the details of "transitioning" providers, and the intensely secretive nature of the ongoing investigation. All that secrecy is preventing the release of the findings, which are the only thing that can debunk any notion of politics in the audit, once and for all.



Dennis Grantham

Dennis Grantham


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