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The least you need to know about the New Mexico epilogue

April 25, 2016
by Julie Miller, Editor in Chief
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Philosopher George Santayana reminds us that, “Those who do not remember the past are condemned to repeat it.”

When you consider the emerging wave of fraud investigations concerning behavioral health treatment centers in California, it’s quite appropriate to review the debacle in New Mexico and see if there’s anything to be learned.

What happened in New Mexico?

After more than three years of wrangling, the fraud investigations of 15 New Mexico not-for-profit mental health treatment centers have been resolved at last. The Albuquerque Journal reported in early April that all of the treatment centers named in the investigations were cleared of wrongdoing. Ordinarily that would be great news, except in this case, it’s too late: Pretty much all of the centers went out of business as a result of their payments being halted indefinitely during the process. Combined, they had served at least 85% of the state’s mental health patients.

What prompted the investigations in the first place?

The state claimed an audit performed by outside consultants identified $36 million in fraud and overbilling from the treatment centers. The truth that ultimately came out was that the consultants used a flawed formula to extract that dollar figure, not to mention they had a notorious reputation for poor credibility. The consultants never followed up with the treatment centers or confirmed their findings. As it turns out, subsequent investigations showed $1 million in overbilling mishaps but no evidence of fraud and nothing that would require the wholesale shutoff of state funding to the programs.

Didn’t the treatment centers have some recourse?

Apparently not. The state claimed it was obligated to stop payments during the fraud investigation, but New Mexico In Depth says that according to federal law, that’s not true. Now it looks as if 10 of the centers are embroiled in lawsuits against New Mexico, and several are calling for a new federal investigation because they were denied due process, a move supported by the four Democratic members of New Mexico’s congressional delegation.

What about the patients?

Early on, Gov. Susana Martinez’s administration issued $18 million worth of no-bid contracts to five Arizona-based providers to take on the patients. And there are accusations, according to RAC Monitor, that Martinez was playing a political game, powered by contributions to her political fund. Other sketchy moves included ending the fraud investigation early and intentionally tweaking the language in a letter from the consultants to boost the credibility of the allegations.

Many clinicians lost theirs jobs, meanwhile, many patients missed their appointments and saw heavy-handed utilization management under the workaround with the new providers, according to RAC Monitor.

Now what?

It’s not as if the shuttered centers can open their doors tomorrow, so the litigation continues to ideally make the centers whole again, legal investment notwithstanding.




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Julie Miller

Editor in Chief

Julie Miller


Julie Miller has more than 14 years of experience observing, analyzing and reporting on various...

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